Category Archives: Metals

Is Gold Leading Yield Higher

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Spot Gold has hurdled– and is sustaining above– its prior significant rally peak at $1307.40, which has the right look of completing a meaningful April-June rounded-bottom pattern, which, if accurate, indicates that GOLD has entered a new upleg from its May 30 pullback low at $1199.84, which projects next to $1440-$1470.

Only a break below the post-Brexit spike low at $1244.74 will wreck the developing bullish set-up. As for 10-Year YIELD, the Brexit reaction represents the third time in 2016 that YIELD approached or pierced 1.50%, which for the third time appears to be containing a falling YIELD structure.

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All That Glitters is Gold (by Goldsqueeze)

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I have to be honest – I did not think Brexit had a chance.  Apparently Wall Street didn’t either because trading on Friday was a disaster for equity markets around the world, with banks taking a particularly hard beating.  There was a very clear flight to safety with defensive sectors like Utilities and precious metals outperforming.  Speaking of precious metals, gold, silver, and the miners had a terrific day as you will see below.

The tide is turning folks.  Equity markets, depending on how one measures valuation, are at or near all-time highs.  Earnings have been declining for months and yet stocks continued to march higher (at least until yesterday).  Precious metals have been bottoming for over a year as both fundamentals and technicals continue to tilt in the bull’s favor. In my post from Wednesday I commented, “I feel like there is going to be a huge move soon, possibly in [both equities and precious metals], but I have no idea which direction it will be.”  Well, I think Brexit has given us the answer.

Today’s post will be chart-heavy with annotations and a few comments smattered about.  My takeaway from Friday is nothing more than a confirmation of what I’ve been saying for over a year: equity markets are topping and precious metals are bottoming – it’s time to position yourself accordingly. (more…)

It Must be a Gold Bull Market, Because…

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Dear SoH, I know this is somewhat Gary-specific, or Gary-indulgent, but I like to hammer everybody over the head in none-too-subtle ways now and then…

It must be a gold bull market because…

  • Gold analysts (code for gold obsessives; analysts cover asset markets, including gold), who for years pumped people to be bullish despite an obvious bear market, are now taken seriously again as they issue the same dogma.
  • A Technical Analyst months ago advised “30,000 coffins” would be needed for gold bugs and has since gone quiet while another is bearish, no bullish, no bearish again, no bullish again. Charts are only one component of gold market management, but the TA’s are again enthralling the gold community with lines and squiggles.
  • Yet another gold bug TA somehow manages to tie in cycles and God for a bullish view of gold and silver and a 2016 crash for world markets. There’s a niche for everything, I guess.
  • The major media as well is in obsession mode, as we find out about bullish calls on gold by people smarter than we are, like Soros, Gundlach and Druckenmiller.
  • And to balance it all out, there is a man and his computer advising that gold has not yet seen its cycle lows.

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A Dollar and (My) Two Cents

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Quite a Friday we had last week, huh? Upon checking my “End of Week” Charts, I noticed some interesting behaviour and thought I’d share my observations.  Last weekend sometime, I shared a weekly chart of the US Dollar and that it was approaching its 20 week MA.  I use the 20week and 20day moving averages as basic bull/bear filters.  I’m only bullish on stocks that are above both and I’m only bearish on stocks that are below both.

I find this makes for an easy and efficient filter.  I thought that the US Dollar had reversed short of the test until I saw it after the close Friday and realized it had tested the 20week MA exactly.  Take a look. (click any chart for a larger size version)

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‘Inflation Trade’ Alive and Well

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I don’t write the title because the precious metals took off Friday on the bad jobs report. Far from it. That is what gold is supposed to do under such circumstances as its fundamentals got a boost and the perceptions of a hawkish Fed got repelled.

I write the title despite the fact that the inflation barometer, TIP/TLT, tanked and commodities were moderate, post-jobs. Yesterday we noted: Inflation Expectations Sagging, including a declining TIP/TLT and a bullish looking TLT (each a form of non-inflationary signaling). Friday they got bearisher and bullisher, respectively.

tip.tlt (more…)