saveyourassetsfirst3 |
- HUI Breakdown Attempt - Got Gold Report
- Finding A True Value For Gold And Silver: Part I
- The Lost Jesuit Gold of the Sierra Madre
- 4 Precious Metals Stocks To Consider
- Adobe Has More Than 12% Downside: Best To Look Elsewhere
- Freeport-McMoRan: Copper Glut Will Hurt Profitability
- Some Good And Not So Good Reasons To Buy Gold
- SilverFuturist: “Cash for Gold” on South Park
- The Petro Dollar Discussion with Chris Duane
- Links 3/25/12
- CRB Has A Bull Double Bottom
- Gold Stocks Vs. Gold
- Burning Bridges And Halfway Houses
- Another Tungsten filled (Kilo bar) gold bar found
- CAN BERNANKE BREAK THE DOLLAR RALLY?
- The Secret of Oz: Solutions For a Broken Economy
- Mike Maloney: What’s Going On?
- Silver Update: “Tungsten Bars”
- Tungsten Filled Gold Bar Found In The UK
- Calling Another Bottom in the Precious Metals Sector
| HUI Breakdown Attempt - Got Gold Report Posted: 25 Mar 2012 03:57 AM PDT
SOUTHEAST TEXAS (Got Gold Report) -- With the HUI approaching and challenging its technical support, we thought it might be interesting to see which of the gold miners in the AMEX Gold Bugs Index (HUI) were responsible for dragging down the index of 15 gold and silver producers. In just a moment we share a chart montage of all of the HUI components for the last two years, weekly. It's not very difficult to see which of the companies is causing the index to move lower, under pressure, but first, here's a 5-day 30-minute view showing two breakdown gaps lower, both of which were soon reversed by the market. That is important because so far the HUI breakdown of its falling wedge pattern has failed to get additional downside traction.
Continued... *** The HUI is flirting with a technical breakdown of a normally bullish falling wedge pattern in our own view of the current setup. Here's a graph showing as much. We recently commented to subscribers that breakdowns of the HUI are less important to us than technical breakdowns of individual issues and we went on to say why. In another, related topic, we have noted in the past that the vast majority of the "damage" sustained by smaller miners has usually already occurred by the time of an HUI support breakdown.
Greener Pastures? What does the broad based weakness in the Big Miners mean? We think it means that liquidity has been exiting the miners at the margin (and in some cases wholesale, with urgency). That suggests to us that people have grown tired of the precious metals stocks, and some must be convinced that the gold bull market has "peaked." Do we think they are right? No, we do not think so. They may be "right" very short term, but longer term the miners will begin to reflect the substantial cash flow and high profit margins that are accruing to them now in our humble opinion. In addition, some of the liquidity leaving the miners has been moving into the Big Markets to chase companies like Apple and Bank of America, and after the dismal performance of the mining companies over the past while, who can blame people for looking for 'greener pastures.' We track the HUI for more than one reason, but one reason is that it can be a bellwether, a window into what so-called Big Money believes is in store for the price of gold and silver. When the HUI is weaker, such as it is now, it makes metals traders believe that Big Money is not enthusiastic about the prospects for gold and silver. Reactionary traders are influenced by the mining share indexes. To some of them the underperformance by the HUI is a signal, a klaxon blaring that gold is about to plunge in price. (We have actually heard from some of our colleagues precisely that, by the way. Their comments sound something like: "The HUI is pricing in a gold top!" That, and other similar fear-based commentary which we find interesting on an intellectual level, but don't believe for a minute.) Having said that, this is not the first time the HUI has looked gimpy and weak in this 10-year bull market for gold. One example occurred in the summer of 2007 as gold struggled to get through a $700 barrier it first eclipsed a year earlier. Late that summer the HUI broke down and sold off harshly as low liquidity, disgust and exhaustion all came together. That short-lived breakdown bear trap event is visible in the chart below. HUI with CDNX, since 2005, weekly. Back on point: The 2007 HUI breakdown was spectacular, but very brief, reversing and racing higher as gold managed to break back through the $730 previous pinnacle on its way up to $1,000 for the very first time in early 2008 (just before the 'wheels came off' and worldwide fear of a banking collapse became dominant for a time). It should be obvious, but we are of the opinion we are in a similar period of investor exhaustion with gold, silver, the bigger mining stocks and especially The Little Guys. Periods of investor exhaustion are times for buying in the Great Gold Bull, not times for selling in our opinion. They are times of opportunity for those willing to tough through a negative liquidity period and those with the courage of their convictions. Of course everyone can and should make up their own mind about such things. COMEX Commercial Traders in Hurry to Reduce Shorts in Gold On another note, we have finished our weekend updates to the linked technical charts located on the subscriber pages, including commentary on the changes in the CFTC commitments of traders report (COT) for gold and silver. As just one example of the commentary, we reproduce below the 'shorthand' comments from one dialog box in one of our charts for gold.
Gold, 1-year, daily. One of twelve technical charts for Got Gold Report Subscribers for gold, silver, mining shares, important ratios and the USDX. Vultures have access to all our technical charts 24/7. Take a look at the graph below which tracks the nominal net short positioning of the combined commercial traders (LCNS) of gold futures on the COMEX, division of the CME. Notice, please, the rapid pace of commercial net short positioning reduction over the past three reporting weeks as gold declined $133.43 or 7.5%. Traders the CFTC classes as "commercial," the natural hedgers including bullion banks and the largest dealers, have taken this sell-down opportunity to get a lot "smaller" in their collective net short positioning. Indeed, as of Tuesday they are the least net short gold of 2012.
The simple takeaway of the above graph is that people who have to hedge gold inventory, either in hand or coming, or gold positions for long-term passive investment, or a myriad of gold derivatives, were a great deal more motivated to hedge with gold near $1,800 than now with gold having just tested $1,630s as of Tuesday. One has to wonder why the largest, best funded and presumably the best informed commercial futures traders are in such a big hurry to reduce their net short exposure when the price of gold has been generally heading 'their way' (lower) since late February. Could it be they (the best informed gold traders on the planet) believe that the current direction (lower) for gold is very temporary? We have also made numerous comments in our thirty-something technical charts of various guru-recommended small miners and explorers over the past week, including one issuer undergoing a non-fatal disappointment selling mega-spike which we have decided to game from the long side. Non-Fatal Shareholder Disappointment Selling (NFDS) is one of our favorite setups here at GGR, because of its tendency to strongly overshoot to the downside in fairly predictable ways. It has been very, very good to us in the past, by the way, but it does take a certain kind of Real Vulture patience and discipline to game - so it is definitely not for the ADD infected momentum crowd, or for widows, orphans and a majority of others. We absolutely LOVE buying the disgust and panic of others at panicky, way too cheap levels, how about you? It is a company with an amazing gold deposit well north of 4 million ounces of decent to high grade material that has very quickly become "on sale" and is getting close to fire sale pricing. this will be our third foray with that particular company in eight years, the last play resulting in a sure-enough '10-bagger,' so we are favorably inclined to the company and its management. (Vultures will find it in the Vulture Bargain Candidates of Interest (VBCI) section, nestled between Great Panther Silver and Kaminak Gold.)
For readers and Vultures who are interested in bass fishing, that 19-inch, 3.7 pound largemouth bass is only two years old, having been introduced into a 9-acre impoundment in May of 2010 as a 3 or 4-inch, roughly 1-ounce minnow. With ideal conditions and ample forage in our fishing lake on the ranch, this specimen has increased his/her length by 375% and mass by three orders of magnitude in just UNDER two years. We believe that to be a truly phenomenal growth rate. We have had a terrific spawn this year and it occurred quite early (beginning in early February) thanks to warmer than normal weather. We are delighted to say that there are literally hundreds of small, baby bass already prowling the shorelines looking for stuff to eat. Dragon fly larvae, aquatic bugs, worms and tiny minnows are in big trouble! The great spawn means we can now begin removing some of the larger bass from time to time and they are fine table fare. If we seem a little scarce just ahead, cut us some slack. Fishing and lake management are important too! Courtesy Got Gold Report Due to the nature of this particular issue of the Got Gold Report we have decided to share it in the public domain the same day it is being sent to our subscribers as a courtesy to our now large and rapidly growing GGR readership. If deemed worthy, kindly share it with friends and colleagues by copying and pasting the link in your browser. Thanks very much for investing your time with us today. |
| Finding A True Value For Gold And Silver: Part I Posted: 25 Mar 2012 03:38 AM PDT By Retired Aviator: One of the greatest difficulties with deciding whether to invest in gold or silver is to come up with a fair valuation for the precious metals. As investors, we invariably have to make a buy decision and a sell decision. The hard question is, at what price do we buy or sell? With income-producing investments such as rental real estate or businesses (stocks), our buy and sell prices can be calculated based on projections of the income produced (plus maybe something thrown in for the net assets). That is standard security analysis; the "discounted cash flow" method, for example. With commodities such as precious metals, however, we know there is no income produced or business growth, so it becomes very difficult and highly subjective to judge just how much gold and silver are worth. There is little that is both objective and substantive to go on in coming up with Complete Story » |
| The Lost Jesuit Gold of the Sierra Madre Posted: 25 Mar 2012 03:30 AM PDT bc Alter |
| 4 Precious Metals Stocks To Consider Posted: 25 Mar 2012 03:06 AM PDT By Mel Daris: Overall, the basic materials industry has been having a good time of late, especially in the gold and silver sectors. With rising demand for these materials unlike anything we have seen since the recession hit, some mining and trading companies have been raking in profits across the board. With maybe one specific exception that I will discuss below, I expect stocks in this industry to continue to be good investments well into 2012. Silver Wheaton (SLW) is no exception to this rule, even though this company has had its fair share of worries. Last year, as silver prices soared, Silver Wheaton faced some financial challenges. As a company that puts up capital for mining companies to begin operations, Silver Wheaton generally buys by-product silver and other precious metal production from those same companies for about $3.90 per ounce. In 2011, the price of silver went up so high that those Complete Story » |
| Adobe Has More Than 12% Downside: Best To Look Elsewhere Posted: 25 Mar 2012 12:45 AM PDT By Takeover Analyst: As investors, we are at a critical juncture. One path will lead us down the road of investing in mature firms that the efficient market has already fully appreciated. Another path takes us down the road of investing in smaller underfollowed companies that will potentially receive the Street's attention. With the Fed printing money like there is no tomorrow, the government spending beyond its means, and the lack of a gold standard, it's time for us to recognize that we are living in a Platonic world. Our economy has functioned through a currency that has deluded investors into the housing bubble and the internet bubble. Perhaps the best way to act now is to invest in companies within the social media sector. There is plenty of room to penetrate and significantly greater upside than downside. Again, smaller companies are likely to generate the highest returns. BroadVision (BVSN) and Omtool (OMTL) Complete Story » |
| Freeport-McMoRan: Copper Glut Will Hurt Profitability Posted: 25 Mar 2012 12:42 AM PDT By ValueMax: Freeport-McMoRan (FCX) could be badly hurt by a falling demand for copper in China. China's economy is slowing down and, with it, production of electronics and other items that need copper as a raw material. This is causing stockpiles of the base metal to gather dust in warehouses in Shanghai, which is driving down prices. Bloomberg reports that prices for May delivery orders of copper fell by .6% in London. The fall was caused by reports that stockpiles in Shanghai exceeded present Chinese demands. A Bloomberg survey indicated that the March inventory was 530,000 tons, which was more than double that for the fourth quarter of 2011. The inventory then was 200,000 tons, which means that there were no buyers for around 330,000 tons of copper. China's demand for copper fell by 12% between December 2011 and February, according to Reuters. Part of this fall can be attributed to the Complete Story » |
| Some Good And Not So Good Reasons To Buy Gold Posted: 25 Mar 2012 12:00 AM PDT By Anurag Wakhlu: Gold is an investment (or an asset class, if you may) that has demanded a lot of attention recently, including comments from the Oracle of Omaha, Mr. Buffet himself. Besides its glittering allure since the beginning of mankind, we had the"gold standard" till 1971 (no pun intended), a safe haven in the times of crisis and more recently, an inflation hedge (or has it?). Below I look at some pros and cons of owning gold as an investment rather than addressing its undeniably important but intangible psychological benefits, especially in countries such as India which is one of the largest consumers of gold. The Bear case First, take a peek at the nominal (not inflation adjusted) price of gold in US Dollars (USD) since the 1800s. Pictures are worth a thousand words, so I will let them do most of the talking. Gold cost about $19/ounce for a very long Complete Story » |
| SilverFuturist: “Cash for Gold” on South Park Posted: 24 Mar 2012 11:17 PM PDT The always entertaining, educational and sometimes armed (see wrench) Silver Futurist. from silverfuturist: ~TVR |
| The Petro Dollar Discussion with Chris Duane Posted: 24 Mar 2012 10:57 PM PDT Chris Duane had a busy weekend. This discussion with our friend Rahul from AltInvestors.com focused on wars for oil. from AltInvestorshangout: Part Two ~TVR |
| Posted: 24 Mar 2012 09:55 PM PDT Lambert again provided many links! Shearwaters take 'single sex' summer holidays BBC Mangled Horses, Maimed Jockeys New York Times. :-( Facebook asserts trademark on word "book" in new user agreement arstechnica. Huh? A trademark is a specific visual image, it has to be registered with the US Patent and Trademark Office, and you can get a trademark only in specific categories and then you have to be able to demonstrate use as of a certain date. The article discusses that there are unregistered trademarks, but no IP lawyer I know of would recommend relying on an unregistered mark. The idea that you can assert trademark status with no accompanying use (the Facebook logo does not contain the word "book") is an attempt to bully the uninformed. Mafia mobster is freed from jail just 12 months into 15 year sentence because of ALLERGY to the beans on prison menu Daily Mail (hat tip reader May S) The Case for Sleep Medicine New York Times. So how low is the NYT prepared to go in defending big corporate interests? This is an article from an English professor criticizing a large sample study by the BMJ. Lordie. Is Your New HDTV Watching You? HDguru (hat tip reader furzy mouse). I'm told that iPad 2 and higher are all listening devices. The NSA total surveillance program is further along than you think. "Temporal Patterns of Happiness and Information in a Global Social Network: Hedonometrics and Twitter" One Happy Bird. Dated but still fun. Breaking Up with the Sierra Club Orion Magazine. Over frackikng, on which SC has become an astroturf organization. Summer in March, 2012, draws to a close Weather Underground. Really cool even if you aren't a weather geek. Tungsten Filled 1 kilo Gold Bar Discovered in UK Silver Doctors (hat tip Philip Pilkington) Soaring Oil Price & Weakening US Economy On the Edge with Max Keiser. An interview with Chris Cook Vince Cable hints coalition banking row is brewing Guardian. One faction is interested in having a state owned bank to pursue public goals, such as lending to small businesses. James Murdoch Board Seats Dwindle Amid BSkyB Scrutiny Bloomberg Italy's jobs minister fears for life as labour market shaken up Guardian The shape of the future David Kaiser The False Debate About Attacking Iran Nicholas Kristof, New York Times Top 10 Lessons of the Iraq War Foreign Policy. An important read. Lambert highlights Lesson #1: The United States lost. U.S. Plans No Charges Over Deadly Strike in Pakistan New York Times. Quelle surprise! Obama's Creepy Executive Order: Permanent War Economy Progressive (hat tip reader May S) Will Democrats Strip Civil Liberties from Their 2012 Platform? Atlantic. This is a rhetorical question. Since Obama is stripping them in practice, does whether he pretends to honor them for campaign propaganda purposes matter? I assume they'll keep the same empty promises in place on the assumption any challenges will come from what will be deemed to be the far left and right blogistan and be ignored. Aide: Former Vice President Dick Cheney recovering from heart transplant Washington Post. I think any human heart would reject him. Albuquerque Mayor Urges Police Union to Stop Payments to Officers in Shootings New York Times SB 469 Would Make Civil Disobedience a Felony in Georgia Atlanta Progressive News (hat tip reader Deontos) A Bailout by Another Name Gretchen Morgenson, New York Times. I hope to post on this later… Tom Murphy Interview: Resource Depletion is a Bigger Threat than Climate Change Oil Price (hat tip reader May S) Can Radical Efficiency Revive U.S. Manufacturing? Scientific American (hat tip reader Paul T) 'Greed is the Beginning of Everything' Der Spiegel (hat tip reader Peter J) Antidote du jour:
|
| Posted: 24 Mar 2012 09:47 PM PDT Cash Flees Broken Euro And Euroland. Investors are moving mountains of money into hard asset markets within CRB, or buying the whole basket. Inflation and war fears pump oil and gold. "Is The ECB Masking The Accelerating Deposit Flight In Italy And Spain?"
"While LTRO may have slowed the need for immediate asset sales and larger de-leveraging in European banks, the two most significantly worrying trend concerns remain front-and-center – those of deposit flight and lending cuts. The latter remains a concern for the BIS, who note in their recent report, that lending curtailment by European banks focused primarily on risky (non-sovereign) and USD-denominated (EM mostly) debt as banks sought to reduce risk-weighted assets (RWA) to meet Basel III capital rules. It would appear though that banks remain in de-leveraging (asset sale) mode, in anticipation of the end of ECB facilities down the road, which will become increasingly troublesome given the encumbrance of so many of their assets already (in) the ECB itself." "What is most concerning though is the dramatic and accelerating deposit outflows from not just Greece but Italy and Spain (which just happen to be by far the largest 'takers' of LTRO loans). In other words, as more and more deposits outflow from these two major sovereign nations' banking systems (notably to Finland, Germany, and Luxembourg apparently), the only way to fund bank liabilities (as long as the inter-bank market remains dead…which is likely given (with) self- and projected-knowledge) will be the ECB." -Tyler Durden Zerohedge 3-12-12
        This posting includes an audio/video/photo media file: Download Now |
| Posted: 24 Mar 2012 04:21 PM PDT As anyone interested in gold knows, gold has risen for 11 consecutive years. Where it goes from here, time will ultimately determine. Readers of this blog know I think it still has a long way to run, determinable primarily by the Federal Reserve's continued mismanagement of the money supply. More perplexing has been the performance |
| Burning Bridges And Halfway Houses Posted: 24 Mar 2012 04:00 PM PDT Gold University |
| Another Tungsten filled (Kilo bar) gold bar found Posted: 24 Mar 2012 02:59 PM PDT Last time it was a 10 Oz bar found in Germany. This Kilo bar was subjected to closer examination when it was found to be 2 grams light. Looks like the drill and fill crowd is getting better, or maybe this was one of their first "rough" attempts. Click on the link to see the pictures... http://www.zerohedge.com/news/tungst...d-bar-found-uk Quote: The last time a story of Tungsten-filled gold appeared on the scene was just two years ago, and involved a 500 gram bar of gold full of tungsten, at the W.C. Heraeus foundry, the world's largest metal refiner and fabricator. It also became known that said "gold" bar originated from an unnamed bank. It is now time to rekindle the Tungsten Spirits with a report from ABC Bullion of Australia, which provides photographic evidence of a new gold bar that has been drilled out and filled with tungsten rods, this time not in Germany but in an unnamed city in the UK, where it was intercepted by a scrap metals dealer, and was supplied with its original certificate. The reason the bar attracted attention is that it was 2 grams underweight. Upon cropping it was uncovered that about 30-40% of the bar weight was tungsten. So two documented incidents in two years: isolated? Or indication of the same phenomonenon of precious metal debasement that marked the declining phase of the Roman empire. Only then it was relatively public for anyone who cared to find out on their own. Now, with the bulk of popular physical gold held in top secret, private warehouses around the world, where it allegedly backs the balance sheets of the world's central banks, yet nobody can confirm its existence, nor audit the actual gold content, it is understandable why increasingly more are wondering: just how much gold is there? And alongside that - while gold, (or is it GLD?), can be rehypothecated, can one do the same with tungsten? From ABC Bullion: ABC Bullion received the following email from one of our trusted suppliers this week. Note: It was not ABC Bullion that purchased this bar, the email and photos were sent to us as a general warning. I xxxx'ed out the city's name to avoid any second guessing as to the name of the dealer. 19/03/2012: Attached are photographs of a legitimate Metalor 1000gm Au bar that has been drilled out and filled with Tungsten (W). This bar was purchased by staff of a scrap dealer in xxxxx, UK yesterday. The bar appeared to be perfect other than the fact that it was 2gms underweight. It was checked by hand-held xrf and showed 99.98% Au. Being Tungsten, it would not be ferro-magnetic. The bar was supplied with the original certificate. The owner of the business that purchased the bar only became suspicious when he realized the weight discrepancy and had the bar cropped. He estimates between 30-40% of the weight of the bar to be Tungsten. This is very worrying and reinforces the lengths that people are willing to go to profit from the current high metal prices. Please be careful. Photos of the cropped bars: 1000g Gold bar cut showing inserted tungsten rods |
| CAN BERNANKE BREAK THE DOLLAR RALLY? Posted: 24 Mar 2012 01:36 PM PDT In response to a bursting real estate and credit bubble in 2007 Bernanke's solution was to crank up the printing press and flood the world with dollar bills. Unfortunately it didn't solve our problems, it only made them worse. The real estate and credit bubbles stayed busted, but that liquidity had to land somewhere. In 2008 it went straight into the energy and agricultural markets spiking the price of crude, gasoline and food. This in turn collapsed a fragile global economy that was already reeling from the real estate implosion. The end result was the exact opposite of what Benjamin intended. Instead of halting the real estate collapse he just magnified the severity of the recession. Unfortunately Bernanke has not learned from his past mistakes. The wicked sell off in 2010 was met with QE2. The even more severe decline in 2011, which should have initiated the next bear market and started the move down into the next four year cycle low, due in 2012, was aborted with additional money printing disguised as Operation Twist and the European version LTRO. On the surface it looks like Bernanke has been successful. The economy has rebounded from near recession in 2011 but the unintended consequences are already in play as oil is now back above $100 a barrel and gasoline over $4 a gallon. Bernanke has steered the Titanic straight into the iceberg and now there's no turning back. If Ben doesn't raise rates and drain excess liquidity oil is going to continue to rise until it destroys the global economy again. The dollar is at a very important juncture. The current daily cycle topped on day 11 which is right in the middle of being left or right translated. Left translated cycles are the hallmark of a declining market (lower lows and lower highs).  Right translated cycles are associated with rising markets (higher highs and higher lows).  How this cycle plays out is going to determine the path for all other assets. The current daily cycle topped right in the middle of being right or left translated. As long as the impending cycle low holds above the February intermediate degree bottom then the pattern of higher highs and higher lows will still be intact and the dollar will still be on the upside of an intermediate cycle.  In this scenario I would expect the stock market to roll over soon and begin moving down into an intermediate cycle low in late April or early May. Gold's B-wave would resume after a short counter trend bounce and continue down to test the December lows.  If however, the dollar were to penetrate the February low it would signal that the intermediate cycle has already topped and the pattern has reversed to lower lows and lower highs. In that scenario we should see the dollar moving generally lower for the next 15-20 weeks.  In this scenario the runaway move in the stock market could continue for another 10-15 weeks, and gold's B-wave probably bottomed on Thursday as another shortened intermediate cycle.  This scenario would also trigger another leg higher for oil which will eventually poison the economic recovery. The next couple of weeks are going to be important. I'm expecting the first scenario where the dollar continues to make higher highs and higher lows, but I'm prepared to reverse course 180 degrees if Bernanke can break the rally and push the dollar through the February 29 low.        This posting includes an audio/video/photo media file: Download Now |
| The Secret of Oz: Solutions For a Broken Economy Posted: 24 Mar 2012 11:14 AM PDT What's going on with the world's economy? Foreclosures are on the rise, unemployment is skyrocketing and this may only be the beginning. Is it possible that solutions to the world's economic problems were embedded in one of the most beloved children's stories of all time, "The Wonderful Wizard of Oz?" The yellow brick, the Emerald City of Oz, Dorothy's silver slippers (changed to ruby slippers for the movie version) — all powerful symbols of author L. Frank Baum's belief that the people, not the big banks, should control the quantity of a nation's money. ~TVR |
| Mike Maloney: What’s Going On? Posted: 24 Mar 2012 10:48 AM PDT In this report Mike Maloney discusses his view on this week's recent metal movements and projects he is working on for us. Christian Garcia discusses: * Chinese Slowdown
from whygoldandsilver: ~TVR |
| Silver Update: “Tungsten Bars” Posted: 24 Mar 2012 10:34 AM PDT BJF examines confirms the Ag bull is still alive and comments on the latest tungsten find in the 3.24.12 Silver from BrotherJohnF: Got Physical ? ~TVR |
| Tungsten Filled Gold Bar Found In The UK Posted: 24 Mar 2012 08:37 AM PDT
Continue reading @ Zerohedge.com |
| Calling Another Bottom in the Precious Metals Sector Posted: 24 Mar 2012 08:35 AM PDT The last time I called an important bottom in the precious metals sector was on December 29, 2011 (as documented here). Well, it's time for another important bottom. I believe the late December lows in the precious metals (PM) sector were THE lows for the metals, for the GDXJ ETF (a rough representation of the junior Gold mining sector) and for silver stocks (as represented by the SIL ETF). The current bottom is much more important for those seemingly perpetual laggards, the senior Gold mining stocks. And why do I think this is such an important bottom? Well, there are several reasons. These were summarized in a recent subscriber letter dated March 16th, re-published below: Gold Versus Paper March 16 2012 Letter Subsequent to this letter, we had last week's action. I believe Tuesday was THE low for the senior Gold mining sector and my subscribers and I bought our remaining 50% bullish position on Tuesday. This week (for once), senior Gold stocks (as represented by the GDX ETF) refused to make a new lower low with Gold on Thursday, setting up a nice short-term divergence at a time when the PM sector was so under loved and undervalued on a short-to-intermediate term basis that a survey of professional Gold market timers recommended a net short position (according to a blogger I respect, as I don't subscribe to this information – link here) and this graphic from sentimentrader.com was floating around the internet:
And then we had the classic "fake out" drop in Gold on Thursday, as captured so well by candlestick charting, followed by a gap up candle on Friday morning. Here's a daily candlestick chart of the GLD ETF (as a proxy for the Gold price) over the past 8 months thru Friday's close to show you what I mean:
I think it is finally time for metal stocks to outperform the metal for a few months (at least). I am bullish on the whole PM sector, however, and think all items will do well. If this type of real-time actionable analysis appeals to you, consider trying my low cost subscription service – a one month trial is only $15. For those uninterested in the risk of speculating on the short-term chart squiggles with a portion of their capital, my advice is simple: buy physical Gold (and a little silver) and store it outside the banking system until the Dow to Gold ratio hits 2 (and we may well go below 1 this cycle).
|
| You are subscribed to email updates from Gold World News Flash 2 To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment