Category Archives: Metals

Death of the Dollar? Gold is an Inflation Hedge? Really?

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[ed: Excerpted from NFTRH 301's opening segment. Those looking for paint by numbers directions and casino game instructions (talking to readers at a certain site that may or may not re-publish this article... not you Slope, which I know will politely tolerate my ramblings :-) ) feel free to just skip the article. You will not get what you are looking for. The balance of NFTRH 301 did the nuts and bolts technical work on the relevant US and global markets, precious metals, currencies, etc.]

Take a look around the gold bull landscape and tell me how many of them are featuring a chart like this, showing the US dollar in a bullish short-term stance (to go with the weekly bullish stance we have noted for so long in the ‘Currencies’ segment).

usd.daily

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Other Markets Update

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This is my vacation post for other (non-equities) markets. For equities check my last post from earlier today. Normal service resumes next Monday 4th August.

Last time I was looking at EURUSD I said that I was expecting a test of rising wedge support in the 1.35 area. EURUSD made that and then slightly lower to test the 200 DMA, so the rising wedge is now broken. Unless we see a fairly fast recovery to new highs I’m now looking at targets for EURUSD in the mid-120s. I’ve been watching this setup for months in the expectation that there should be a strong USD rally at the end of QE3 so I’m expecting this to resolve down. EURUSD weekly chart:

140728 EURUSD Weekly Rising Wedge and Triangle

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1 Reason to Tune out 90% of the Gold ‘Community’

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  1. Because they remained bullish throughout a bear market while spouting slogans and dogma, keeping gullible people in the grip of a fantasy that they are comrades in arms against evil forces and that in the end, good will prevail.

In the end gold will be assigned its value, but there is absolutely no reason that people should have been hurt in the interim by holding the speculations that revolve around gold, especially at the behest of cranks, charlatans and carnival barkers. (more…)

Currencies and Gold, Big Picture

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Uncle Buck and his reserve status were leveraged to the hilt by “The Hero” and now his successor is trying to gently talk the Fed out of its policy stance over time. In other words, tightening is going to come one way or another and Janet Yellen is trying to go the orderly route. When this process becomes disorderly, the USD is likely to benefit from the liquidations elsewhere in the asset world.

Technically, USD is in a long basing pattern. There are those who think it is basing before a renewed decline, reading a Symmetrical Triangle (continuation) pattern into poor old Unc. I think the odds are it is bottoming over the post-2008 years when inflation – try as they might to have promoted it – simply has not taken root. Leaning bullish, watch support and resistance.

usd

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GOLD – Next Hurdle is 1400

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If GOLD can hold above the 1300-1330 major support level shown on the 5-Year Weekly chart below, the next resistance level is around the 1400 level.

There is a convergence of the 50-week moving average, mid-Bollinger Band, -1 deviation level of the downward-sloping channel, and the 5-Year Volume Profile POC (pink line along the right side of the chart) at this major support level.

GOLD has, generally, been under accumulation since June of 2013, although it has been trading in a large range between 1180 and 1400 since then…one to watch in the coming days/weeks, particularly in light of Thursday’s major geopolitical events in the Ukraine and Israel/Gaza Strip.

Battered Miners Ready to Recover?

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Poor old gold has had a rotten week so far. Even today’s attempt to undo some of the damage is getting partly reversed as I am typing this. I would point out that miners might – I say again, might – have eased down to a level that represents a reasonable risk/reward ratio. I, for one, am avoiding precious metals altogether right now, as the beautiful bullish breakout intact as of Friday’s close has been smashed to smithereens.

0716-gdxj