Jump to content

Recommended Posts

On Thursday, I bought Calls on GLD and NUGT

I am in profit (so far)

 

With the RISK of a retest of Lows, or even Lower Lows, Calls are the way to Play this Gold market, if you play on the Long side at all

 

POSSIBLE LOWER LOW, now that GDX-$20 has been breeched
New Miner Bull Threatened as Major GDX Support is Breached Friday December 16, 2016
======================

It appears the miner divergence from gold this past month was a bull trap, as the sector collapsed after the expected Fed rate hike. However, the US Dollar surged higher as Fed chair Janet Yellen telegraphed three more probable rate hikes in 2017, as opposed to the expected two in her post Fed meeting speech. This was enough to run more sell stops in the gold price and take the miners down with it.

When the Fed promised three rate hikes this time last year, the gold price bottomed the next day as it was also sold hard into the final Fed meeting of 2016. However, the miners did not bottom until a month later after a brutal four year bear in which the GDX lost 85%.

What gives me pause on gold bottoming this time just after the final meeting this week, is the equity market breaking out of a two year consolidation as “risk on” is still in play here. The gold price looks very vulnerable now technically and could easily drop below $1000 oz before making a final low as early as Q1 next year.

As I have been mentioning in previous posts GDX ,the ETF for large cap miners, needs to hold the major weekly support level of 20 in order to sustain a technical bull market in the miners. The bull’s last chance would be a close today above 19.80 in the GDX. Given how severely oversold the sector is and sentiment being worse than this time last year, the miners do have a chance of reversing today and closing above this level. The big money shorts have made a killing and could begin taking profits before many begin heading off to the Hamptons for the holidays. However, this bounce eventually needs to exceed the 22.50 area rather quickly in order to give me confidence of a chance at a firm bottom here.

We could also have more US Election drama on Monday as Senate Democrat Nancy Pelosi’s daughter and Clinton campaign manager John Podesta are backing an effort to get electors to ignore the election and vote for Hillary Clinton. This could also spark a short covering rally in the sector as the “Russia rigged the election” rhetoric has been dialed up heading into the US Electoral College decision on December 19th. I realize I am reaching here, as are the Democrats, but it is worth mentioning as a possible sector catalyst none the less.

If the GDX is not able to close today above the 19.80 level, look for the last gap at the 15.50 area to possibly fill as the next level of support. This weekly breach may also set up the very real possibility of an eventual round trip back to January lows and even a chance for a lower low in the mining sector.

==

> http://www.kitco.com/commentaries/2016-12-16/New-Miner-Bull-Threatened-as-Major-GDX-Support-is-Breached.html

Share this post


Link to post
Share on other sites

Hoffman : "India has the world's worst government... This will end in revolution, and a rush for Gold"

.

Is India PROOF Elites Want To CONFISCATE GOLD? -- Andy Hoffman

 

INDU / Dow Jones Ind. Ave.

INDU-3yrs_zps5plx17ot.png

 

Gold in Dow Points

Gold-inINDU_zpswqcib0dy.png

 

SPX-to Gold

SPX-toGold_zpsy1rrbff9.png

Share this post


Link to post
Share on other sites

DOW to GOLD Ratio

 

200 Years

DOWGold_Ratio_1800to2008_pred2.gif

Since 1928 (to 2009)

Dow-Gold-Ratio-Generational-Cycle.png

since 1910 (to 2015), Log scale ... w/ fewer lines

Dow-toGold-LT-c_zpszfyzkhhu.gif

 

Three Years : Dec. 2013 to Dec. 2016

 

INDU-toGold_zpsjzjee1fh.png

 

GLD / Gold : 5-yrs : 3-yrs : 2-yrs : 12-mos / 10d // Last: $107.93 : Gold: $1133.6

GLD-5yrs_zpsmrijtxxe.gif :

Share this post


Link to post
Share on other sites

First Time Ever In The History Of The Gold Market
The technicals in the gold market never been set up better than they are now for a contrarian move higher. On the assumption that gold closes on Friday lower for the week than last week, it will mark seven straight weeks in which gold has closed lower on a weekly basis (this just happened). This has never happened before.

==

MASSIVELY OVERSOLD GOLD

 

GLD / Gold ... 12-mos : 2-yrs :

GLD-12mos_zps97uerpqu.gif

 

> source: http://kingworldnews.com/this-is-the-first-time-in-history-this-has-happened-in-the-gold-market/

Strongest Gold "Buy" Signal In 16 Years - SoT #132

 

Question: Bill: Re: yesterday’s reader’s comment: “Bulls typically don’t retrace 100% of a move which we are close to doing,”

We do in fact have two precedents for such behavior in the current bull market. 1999-2001 was a full retrace at the $250+ level, with an interim high of $320+ in the interim. And of course, 2007-2008 looped from the mid $600s through the mid-$900s and back again. Both times, the near-100% pullbacks were followed by bull surges that almost tripled the gold price 3-5 years later. Meanwhile, the Gold Miner’s Bullish Percent Index has ranged from 100% in July to 7% in November. Despite further declines in the gold price, it’s presently sitting around 11%. I know negative sentiment doesn’t confirm a bottom in itself, but I just wanted to offer some words that I hope are encouraging to a fellow Rap reader.

Answer from Fleck: OK, thanks. Lots of extremely lopsided data points showing up now.”

> http://kingworldnews.com/with-gold-plunging-for-7-straight-weeks/

Share this post


Link to post
Share on other sites

AUD correlates with Gold

 

sophomore-gold-vs-audusd-2011.png

 

gold_20_year_o_aud_zps3yks98gj.png : 20yr-Gold-inAUD : 30yr :

 

AUD vs GLD. update // Gold: $1,139 / AUD: $0.719 = Ratio: Gold-inAud: A$1,585 / GLD: $108.56

 

aud-vsgld_zpsnwwcywlz.gif

 

... But Gold in AUD is in a rising trend

Gold-inAUD_zps1rmur158.png

 

If the Support near A$1520 does not hold - next stop for Gold may be $1300 or so

 

Gold-aud-us-10y-Large_zpsplpnpsgq.gif : update :

Share this post


Link to post
Share on other sites
2016 Marks End To Gold’s Bear Market; More Work To Be Done - Analysts By Neils Christensen of Kitco News
Friday December 30, 2016
Estimated AVERAGE GOLD Price for 2017 : $1,300

(Kitco News) - Not only is gold ending its longest weekly losing streak in more than a decade, but it is seeing its first positive yearly gains since 2012.

07152016NC_001.jpg

 

February Comex gold futures last traded at $1,157.10 an ounce, up 2.2% since last week. This week, gold has benefited from a correction in the U.S. dollar, which has backed down from its recent 13-year highs.

Silver is also seeing a positive week and a solid end to 2016. March Comex silver futures last traded at $16.085 an ounce, 2% on the week and up more than 17% on the year.

Some analysts warn that the latest gains in the precious metals markets could be skewed as a result of thin holiday markets as the precious metal sees its best performance since before the U.S. election; however, some are still calling the latest price action a victory as gold ends the year with gains of more than 9% -- albeit a shallow victory has gold did see gains of more than 30% in the first half of the year. To say the least, 2016 has been a rollercoaster year for gold prices.

However, some analysts are not ready to give up on gold just yet as January and the first quarter is traditionally the strongest period for the yellow metal.

 

“Gold has benefited from U.S. dollar weakness this week and we are looking for this trend to continue in 2017 as the price action seems to be priming for a strong start to the New Year. Gold has been positive every Q1 since 2005 except for one, and we expect to see another Q1 characterized by anemic economic growth,” said analysts at iiTrader.

 

Looking ahead to 2017, among consensus forecasts, the median average price is around $1,300 an ounce. Some analysts see gold’s potential as a safe-haven asset in an environment of global geopolitical uncertainty, unknown impacts of President-elect Donald Trump’s proposed fiscal and economic policies, as well as continued low global interest rates.

While several factors continue to favor the yellow metal in the long term, there is a lot more work that needs to be done in the short term. Jim Wyckoff, senior technical analyst at Kitco.com, described the market as “neutral.”

“From a longer-term technical perspective, the year 2016 did see price action negate a downtrend on the monthly gold chart. From a larger-degree technical perspective, gold bulls and bears are on a level playing field. For the bulls to gain keen longer-term technical strength, they must push prices above the 2016 high of $1,375. For the bears to gain fresh longer-term technical power, they must push prices below the 2015 low of $1,050,” he said.

Levels To Watch

Because of the thin volume during the past holiday-shortened trading week, investors will be anxious to see if there is any follow-through buying in the first week of the New Year.

Joshua Mahony, market analyst at IG, said that he would like to see gold push above $1,165 an ounce before he become more bullish on the metal.

However, Russell Browne, commodity strategist at Scotiabank, said in a recent report that while momentum indicators are turning more bullish, he remains negative on the yellow metal as long as prices are below $1,173 an ounce.

On the downside, analysts continue to keep an eye on support at $1,125 an ounce, which represents the last major retracement level from gold lows in 2015 to its July highs.

The Final Say

Next week will see another shortened trading period as markets are closed Monday in recognition of the New Year’s holiday. However, investors and traders will begin to trickle back into the market as the week progresses. The highlight of a series of U.S. economic reports will be Friday’s nonfarm payrolls report for December.

Before the jobs report is released, markets will receive important manufacturing numbers, service-sector data, minutes from the Federal Reserve’s December monetary policy meeting and private-sector employment data.

==

> http://www.kitco.com/news/2016-12-30/2016-Marks-End-To-Gold-s-Bear-Market-More-Work-To-Be-Done-Analysts.html

Share this post


Link to post
Share on other sites

KITCO Articles

 

It could be a good week for Gold - the market seems "coiled" for a move Up

 

Six Positive Gold Trends For 2017 - WGC Kitco News 01:04PM

RERUN Will Gold Miners Have a 2016 Repeat? Kitco Video News 08:50AM
=== ===

The six trends the WGC highlighted include: heightened political and geopolitical risks, currency depreciation, rising inflation expectations, inflated stock market valuations, long-term Asian growth and opening of new markets.

However, the three standout factors, according to three economists quoted in the report, will be Asian growth, political uncertainty from Europe as well as rising inflation as a result of U.S. policy.

According to Jim O'Sullivan, High Frequency Economics' chief U.S. economist, the Federal Reserve is likely to hike interest rates by 75 basis points this year, followed by another 100 bps in 2018.

. . .

* SPDR holdings rise for the first time since U.S. election
* Long gold positions rise for first time in nine weeks
* Weak physical market demand expected to cap gold's gains

Jan 16 Gold climbed on Monday to its highest in more than seven weeks on buying fuelled by political uncertainty after comments by U.S. President-elect Donald Trump on NATO and China.

. . .

After eight weeks of declining interest in gold, hedge funds started wading back into the gold market, according to the latest trade data from the Commodity Futures Trading Commission.

gold_silver_close_up_small.jpg

 

The Disaggregated Commitments of Traders report, for the week ending Jan. 10, showed money managers increased their speculative gross long positions in Comex gold futures by 7,777 contracts to 135,563. At the same time, short bets fell by 11,345 contracts to 79,884. Gold’s net length now stands at 55,679 contracts.

Gold’s net length bounced off its lowest level in almost a year, increasing 52% from the previous week. However, some analysts noted that long interest in gold is still at depressed levels and most of the increase was due to short-covering. . Gold’s net length is down almost 80% from its record highs seen in early July. During the survey period, gold prices rallied 2.2% to their highest point in nearly a month.

. . .

NYSE Arca Gold Miners Index, finished the year up 55 percent, handily beating all other asset classes, explained Frank Holmes, chief executive officer of U.S. Global Investors to Kitco News on Tuesday. Miners were followed by commodities at 25 percent and silver at 15 percent. Gold finished up 8.6 percent, its first positive year since 2012, when it gained 7.1 percent, he said. 'Many in the financial media continue to have a bias against gold, even though it generated better returns in 2016 than 10-year Treasuries and the U.S. dollar, which performed half as well. And when it was up as much as 28 percent in the summer, they still didn’t have anything positive to say, arguing it had gone up too much,

. . .

* Trump stimulus, commodities seen fuelling global recovery

* Trade tensions and European political surprises top risks

* U.S. monetary tightening could push up dollar further

 

DAVOS, Switzerland, Jan 16 (Reuters) - A trade war between the United States and China and a strengthening dollar are among the biggest threats to a brightening global economic outlook, according to leading economists at the World Economic Forum in Davos.

As political leaders, businessmen and bankers converge on the resort in the Swiss Alps this week, they can draw hope from a more benign economic picture and a rally in global stock markets on expectations of major stimulus under a new U.S. administration led by Donald Trump.

The backdrop is brighter than it was a year ago,..

Among the biggest concerns for 2017 cited by the half dozen economists interviewed by Reuters was the threat of a U.S.-China trade war, and broader economic tensions, triggered by what they fear could be a more confrontational Trump administration.

Trump is threatening to brand China a currency manipulator and impose heavy tariffs on imports of Chinese goods. Last month he named leading China critic Peter Navarro, author of the book "Death by China", as a top trade adviser.

Share this post


Link to post
Share on other sites

I'm looking at buying some Gold fields for the longer term.Interesting that they're not as SA based as one would assume,offering a nice geographical spread of assets and cashflows

 

https://www.goldfields.co.za/inv_rep_ar.php

From the CEO 2015 report

 

'It is fair to say that, despite the 45%

decline in the price of gold between
2011 and 2015, Gold Fields is today
in much better shape generating
substantially more cash than when
the gold price was at its peak. While
this is reassuring in the current low
price environment, it also positions
Gold Fields for enhanced cash
generation when the gold price
eventually starts to appreciate again,
which it undoubtedly will.'

Share this post


Link to post
Share on other sites

I attended the Mines and money conference in December and listened to the Grant Williams (runs RealVision TV with Raoul Pal and hedge fund manager) presentation. It's very insight and would highly recommend everyone listens to it. Williams talks about the reaction to Donald Trump's election and joins a series of dots that may lead to the end of the petrodollar system and a new place for gold in the global monetary system. It's a must listen with huge implications for gold and silver imo.

 

Share this post


Link to post
Share on other sites

This chart shows me that GDXJ (Junior Gold shares) may be headed into a Buy window

Gold-toGDXJ-65pct_zpsditg3e8d.png

 

Support looks strong at GDXJ-$32.50 - and it should be a good Buy there if Gold holds up.

You might also Buy GDXJ calls and Buy Gold puts, or use GDXJ as a replacement for Gold holdings.

It all depends on how Bullish you are - but this window looks interesting to me/

Share this post


Link to post
Share on other sites

GOLD and Bitcoins - will prices touch (or overlap) again soon?

BTX at 98% today... looks like the 4-6 months cycle for Gold is rolling over

 

Gold : $1277.5 ... GLD : 2-yr : 10d

gold_zpsqglp9eso.png

 

Bitcoins : $1253 (98.1% of Gold)

BTC-5mo_zpszl3tby90.png

 

I think both will drop, before heading higher.

The fundamental reason may be: Rising interest rates / Falling bond prices

 

TMF at $19.86 "and falling" as LT rates rise

The rise in TMF (3x Bull-on-Bonds) may be over ... 2yr : 10d-chart :

TMF-2yr_zpsyrq777tu.gif

 

Rising interest rates, may turnaround the falling dollar, and "put the Kabash" on the rise in Gold and Bitcoins

These prices move together : TMF, GDX, UGLD, SLV : Bonds, Gold stocks, Gold, and Silver.

And they have been moving in a shared 4-6 months cycle:

 

TMF -etc. ... 2-yrs : 5-yrs :

TMF-etc3_zpstrspmtlw.gif

Share this post


Link to post
Share on other sites

I think the 4-6 months cycle has rolled over

 

au0365nyb.gif

 

-------- delay: 6 months-------> au0365nyb.gif

Share this post


Link to post
Share on other sites

Looong Term Gold price - back to -- 1792 ! Peak was $1920 in 9/2011
gold-long-term-chart-1.png

 

> source: http://www.businessinsider.com/long-term-gold-chart-going-back-to-1792-2013-4

 

GLD : All data : All : fr.Peak 5-yrs : 4-yrs : 2-yrs-wk :

GLD-all_zpsdrvtl96a.gif

 

BTS / Bitstamp ... 8-years : Peak (for BTS) was $1,892 on 5/11/2017

BTC-8yr_zpstvtqjdnb.png

 

Note the Gold low at around $250, followed by an upwards drive of less than 10X to $1920.

After the BTS low near $200, will wee see the Bitcoin rally end at less than 10X at around $1900?

Share this post


Link to post
Share on other sites

An interesting article on the demand for physical safe storage facilities for bullion and other hard assets: https://www.bloomberg.com/news/articles/2017-06-06/the-new-gold-rush-is-all-about-vaults

 

Interesting that the holding costs for physical storage are claimed to be lower than holding through a physically backed ETF. Transaction costs will be a lot higher, but still ....

Share this post


Link to post
Share on other sites

Gold's 4-6 months Cycle:

 

The next cycle Low is due any day now /or overdue - and may have come already in early May.

 

GLD: update: end-may: $116.06 +0.44/ UK:GBS: $115.50/ HK-2840: $ 898.5 /7.76= $115.80 : HK-3081: $29.35 r-30.61

GLD.gif : ImgHst.co

 

The longer history of the cycles looked like this: 2013-15 :

 

: Low, Dec.15th,2016: 1129.8 / $103.04 = 10.96 / intraday: 1123/$103= 10.90
Gold-toUSD_zp.png

 

Look what happened after that Dec.2015 Low - a Nice Rally ! And then once again after a Dec. 2016 Low:Gold-toUSD.png

 

In April'17, I said: The Rally "may be petering out in April, and Gold (gold shares and silver), turned lower with bonds."

I anticipated this - and went short, selling Gold positions, and buying puts on TMF, a 3X etf linked to Bond prices.

But this anticipated cyclical low (May/June) either came early, or is coming late - It does not look as distinct (yet!) as prior lows.

So I am relunctant to bet on the Low and Buy at this stage.

 

TMF - this chart was from mid-April

"Rising interest rates, may turnaround the falling dollar, and "put the Kabash" on the rise in Gold..."

These prices tend to move together : TMF, GDX, UGLD, SLV : Bonds, Gold stocks, Gold, and Silver.

And they have been moving in a shared 4-6 months cycle - but this latest dip in Gold has not been accompanied by TMF until this week

 

TMF... 2-yrs : 5-yrs : 6-mos / 10-d :

Gold-toUSD.png :

TMF HAS finally dropped - & with it Bonds, Gold, Gold shares, silver...

TMY is approximately about 9% lower, over just four days

TMF-10d ... update

: TMF at $20.00 and Looking for a cyclical Low possibly, Since the Gold low is due, or overdue.

TMF-10d.gif : ImgHst.co

 

But the other prices have fallen less. And there is some possibility these prices are beginning to decouple.

Share this post


Link to post
Share on other sites

I get the impression that Gold is ready for a big move up...maybe in the run up to Xmas (classic pattern) or sooner.

 

 

Share this post


Link to post
Share on other sites

i missed the recent low. and am now waiting for the retest, or pullback to buy.

 

the cyclical low seems to be in

Share this post


Link to post
Share on other sites

The US Dollar may be very near Key Support - if it breaks, Gold may soar

 

DXY / Trade-weighted US Dollar ... update

 

dgCKSMi.gif

 

GLD - Gold's etf ... all data -- threatening to break the downtrend, as the USD is weak

HqfpJGA.gif

=

Share this post


Link to post
Share on other sites

Alex Jones / Roger Stone: Trump going into "full War mode"

- as Scaramoche survives, Spicer leaves

 

Roger Stone Reacts To Sean Spicer Resignation

 

Excerpted from The Alex Jones Show (7/21/2017)

 

The Truth will win out - maybe. But we may need a war first

 

Now that Insane McCain is out of action, the timing may be better

 

Next up - as Stone says: Fire Rosenstein, Fire Mueller !

 

Lock 'em up too, maybe... along with Hillary - who should have been locked up long ago

Share this post


Link to post
Share on other sites

GOLD : I'm not impressed !

 

I think we saw a cyclical Low at the beginning of July, but I 'm not impressed by the volume or the Size of the Rally in GLD or GDX

 

Gold-in-Euros - has gone virtually "nowhere"

t0En9bA.png

 

GLD
GpsOIEB.png

 

GDX

D1qARzi.gif

Share this post


Link to post
Share on other sites

China, Inflation & Gold

 

China is a relatively open economy; therefore it is subject to the impossible trinity. China has also been attempting to do the impossible in recent years with predictable results.

Beginning in 2008 China pegged its exchange rate to the U.S. dollar. China also had an open capital account to allow the free exchange of yuan for dollars, and China preferred an independent monetary policy.

The problem is that the Impossible Trinity says you can’t have all three. This model has been validated several times since 2008 as China has stumbled through a series of currency and monetary reversals.

For example, China’s attempted the impossible beginning in 2008 with a peg to the dollar around 6.80. This ended abruptly in June 2010 when China broke the currency peg and allowed it to rise from 6.82 to 6.05 by January 2014 — a 10% appreciation.

 

This exchange rate revaluation was partly in response to bitter complaints by U.S. Treasury Secretary Geithner about China’s “currency manipulation” through an artificially low peg to the dollar in the 2008 – 2010 period.

After 2013, China reversed course and pursued a steady devaluation of the yuan from 6.05 in January 2014 to 6.95 by December 2016. At the end of 2016, the Chinese yuan was back where it was when the U.S. was screaming “currency manipulation.”

Only now there was a new figure to point the finger at China. The new American critic was no longer the quiet Tim Geithner, but the bombastic Donald Trump.

Trump had threatened to label China a currency manipulator throughout his campaign from June 2015 to Election Day on November 8, 2016. Once Trump was elected, China engaged in a policy of currency war appeasement.

 

China actually propped up its currency with a soft peg. The trading range was especially tight in the first half of 2017, right around 6.85.

In contrast to the 2008 – 2010 peg, China avoided the impossible trinity this time by partially closing the capital account and by raising rates alongside the Fed, thereby abandoning its independent monetary policy.

. . .

The impact these two prior devaluations had on the exchange rate is shown in the chart below.

Yuan.png

 

Major moves in the dollar/yuan cross exchange rate (USD/CNY) have had powerful impacts on global markets. The August 2015 surprise yuan devaluation sent U.S. stocks reeling. Another slower devaluation did the same in early 2016. A stronger yuan in 2017 coincided with the Trump stock rally. A new devaluation is now underway and U.S. stocks may suffer again.

 

By mid-2017, the Trump administration was once again complaining about Chinese currency manipulation. This was partly in response to China’s failure to assist the United States in dealing with North Korea’s nuclear weapons development and missile testing programs.

For its part, China did not want a trade or currency war with the U.S. in advance of the National Congress of the Communist Party of China, which begins on October 18. President Xi Jinping was playing a delicate internal political game and did not want to rock the boat in international relations. China appeased the U.S. again by allowing the exchange rate to climb from 6.90 to 6.45 in the summer of 2017.

China escaped the impossible trinity in 2015 by devaluing their currency. China escaped the impossible trinity again in 2017 using a hat trick of partially closing the capital account, raising interest rates, and allowing the yuan to appreciate against the dollar thereby breaking the exchange rate peg.

The problem for China is that these solutions are all non-sustainable. China cannot keep the capital account closed without damaging badly needed capital inflows. Who will invest in China if you can’t get your money out?

China also cannot maintain high interest rates because the interest costs will bankrupt insolvent state owned enterprises and lead to an increase in unemployment, which is socially destabilizing.

China cannot maintain a strong yuan because that damages exports, hurts export-related jobs, and causes deflation to be imported through lower import prices. An artificially inflated currency also drains the foreign exchange reserves needed to maintain the peg.

Since the impossible trinity really is impossible in the long-run, and since China’s current solutions are non-sustainable, what can China do to solve its policy trilemma?

The most obvious course, and the one likely to be implemented, is a maxi-devaluation of the yuan to around the 7.95 level or lower.

This would stop capital outflows because those outflows are driven by devaluation fears. Once the devaluation happens, there is no longer any urgency about getting money out of China. In fact, new money should start to flow in to take advantage of much lower local currency prices.

There are early signs that this policy of devaluation is already being put into place. The yuan has dropped sharply in the past month from 6.45 to 6.62. This resembles the stealth devaluation of late 2015, but is somewhat more aggressive.

 

( A weaker Yuan should help Gold, until it becomes "too cheap", and that cheapness inspires a rally in the Chinese currency)


“With inflation still subdued it appears that the US is heading back to consistently positive real rates. All else being equal that presents a major headwind to the gold price,” he noted. “However, there are significant offsets that seem likely to counter that downward pressure over the next six to 12 months.”

Kendall believes the U.S. dollar pressure could continue as “global reserve managers are overweight USD.”

“The trend appears to be to diversify again. We don’t expect direct diversification into gold but a rotation out of USD into EUR and JPY would benefit gold indirectly,” he explained.

Likewise, “if medium term inflation expectations do start to rise then gold should perform better than longer-dated Treasuries,” he said.

Kendall even looked at retail demand from the two largest gold-consuming nations – India and China.

“Gold has been sustained above $1,200 for much of the past two years despite a recession in the Chinese jewellery industry and multiple policy challenges to the Indian market,” he wrote. “There are tentative signs of improving sales in the former, while a period of policy stability would definitely benefit the latter.”

Share this post


Link to post
Share on other sites

GDXJ / Junior Miners update : $32.39 -0.29 : - 0.89% at 10/25/17

 

1ytUGj5.gif

 

====
GDX- : $22.83 -0.12 : - 0.52% at 10/25/17
GDXJ : $32.39 -0.29 : - 0.89% at 10/25/17
NUGT : $30.43 -0.59 : - 1.90% at 10/25/17
JNUG : $15.80 -0.43 : - 2.65% at 10/25/17

Cycles

WX4tTQO.gif

 

NUGT / 3X Bull on Gold Miners ... update : $30.43:arrow_dn_sm.gif -0.59 at 10/25/17

MLqzKDa.gif

 

JNUG / 3X Bull on Junior Gold Miners ... update : $15.80 -0.43 : - 2.65% at 10/25/17

XN7SUpu.gif

 

GDXJ -to-GDX Ratio

VGWCNkU.png

Share this post


Link to post
Share on other sites

GO OR DIE Resistance Level for Precious Metals

 

SIL vs GLD ... update

 

8KWAdl8.gif

==

Share this post


Link to post
Share on other sites

Gold Is Not The Best Inflation Hedge, This Metal Is - Natixis

 

U2abECH.png

 

Neils-Christensen.jpg
Neils Christensen Wednesday November 22, 2017

(Kitco News) - With global growth and consumer price pressures expected to tick higher in the next few years, one international bank is trying to debunk the myth that gold is a good inflation hedge.

gold-coins-price-graphb.jpg

 

In a report Wednesday, analysts at Naxitis pushed back against the old adage that gold is seen as a traditional inflation hedge. Instead, they prefer a broad basket of commodities, with a focus on base metals and copper in particular.

“Within commodities, precious metals are actually one of the weakest vehicles for combating inflation,” the analysts said.

The report comes as the U.S. sees a modest rise in inflation after five months of stagnant growth. The analysts said that investors should start taking a more defensive positon to protect against rising price pressures.

“Eurozone growth is holding up, the US labor market continues to tighten, and oil has gained pace this year. All of this suggests some heightened potential for inflation to surge,” the analysts said. “By definition, investors cannot predict unexpected inflation that destroys portfolio value. Therefore, it may be prudent to allocate a portion of the portfolio to assets that can protect against this risk and perhaps even offer additional benefits.”

Crunching the numbers, Naxitis said that between 1991 and October of this year, a 1% rise in inflation showed that the S&P was the worst inflation hedge with a beta of 2.5; however, gold was only slightly better with a hedge of 5.2. At the top of the list was the energy sector, which had the highest beta at 28.2, and copper came in second at 18. The bank noted that a broad commodity index had a beta of 13.5 to a 1% rise in inflation.

“In a hot economy, demand for industrial metals is elevated as they constitute crucial inputs in construction and manufacturing,” the analysts said.

Within the gold market only about 14% of demand comes from industrial use mostly as a component in high-end electronics, said the bank. However for copper 65% of demand comes from electrical sector and 25% comes from construction demand.

While Natixis likes copper as the global economy heats up, they note that investors would probably do well with a broad-commodity index as this would hedge against sector specific and production risks.

However, the bank noted that a broad commodity index weighted with soft commodities and oil will not hedge against core inflation, the Federal Reserve preferred inflation measure, as it strips out volatile energy and food prices.

 

(But GOLD is now the Better Buy!)

 

Ratio: Gold-to-CU

HJm9SdN.png

 

Ratio: Gold-to-SPX

TtK5rqD.png

 

Ratio: Gold-to-WTI Crude oil

7l6ljmj.png

 

Ratio: GDXJ (Junior Gold shares) -toGOLD

8ZUOt5e.png

==

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×