Category Archives: Metals

Gold Stock Sector: Rubber, Meet Road

By -

You may have noticed that I have written relatively little publicly about the gold sector over the last few years (we have covered it consistently in NFTRH to keep subscribers aware of the bear’s status, and protected against it). Is that strange for a writer who was probably known first and foremost as a ‘gold guy’? Not at all! It’s just that it is not desirable to get bogged down obsessing on a sector in a bear market when there are other fish to fry on the global macro landscape. But the process of finding and confirming a bottom in the gold sector is now front and center as more of the fundamentals that actually matter come into place. To those fundamentals, we need to marry the technicals.

We have consistently worked a theme that sees a comparison to the 1999-2001 bottoming phase in the gold sector. That was a time when stock markets topped out, an economic counter cycle took hold and gold began out performing most other items. Within this, we have also been considering the possibility of a final washout within the sector, whereby prices decline despite continually improving fundamentals. This condition was in play in Q4 2008, which was the last great buying opportunity.

(more…)

Hulbert Does Harvey

By -

By Biiwii

Much more than CPI inflation needs to be considered with respect to the gold price

Yes folks, it’s the return of the two egg heads (Campbell Harvey and Claude Erb) who first put the scare into gold bugs back in 2013 with the research paper The Golden Dilemma (PDF), which found that as adjusted for CPI, gold was very over valued. Enter Mark Hulbert with the updated warning for inflation-centric gold bugs. Gold has no business being this expensive.

market hulbert, gold price vs. CPI

I have never understood who would want to be one of these “gold traders” (other than the miners with a need to hedge and bullion banks with a need to hedge and manipulate, ha ha ha). Why would you be a trader in an element that is a measure or barometer of other items and conditions? It don’t get it. I guess slick traders speculate with insurance policies, so why not gold too? Everything’s a play after all, in the casino.

To answer Hulbert’s points, beginning with the above…

(more…)

Something Wicked This Way Comes (by Bob Kudla)

By -

The Junk Bond Market topped in 2011, Commodities, as well, the Real Estate Market Topped in 2014, the Stock Market topped in 2015, and now we are seeing gold, U.S. bonds, and the dollar starting to positively correlate.

It is time to revisit with Mr. Exeter. He created a risk pyramid, that shows how investors cascade down from high risk to no risk assets as aversion and default gains steam.

(more…)

US Stock Market and the Gold Sector

By -

To review our stance, which is years along now, the gold sector is not going anywhere until it becomes widely accepted that developed stock markets, including and especially those in the US, are in bear cycles. We have also drawn analogies to the Q4 2008 event that took place in what felt like a nanosecond compared to today’s long, drawn out process. For this reason, a better ‘comp’ has been the 1999 to 2001 time frame. That was a process as well.

Regardless, gold boosters viewing inflation as the reason to buy the sector are still out there pitching, but even they have retooled their pitches for a deflationary world. It is now and always has been a global economic contraction environment (assuming it eventually coerces policy makers into inflationary actions) that would be the primary driver of the next gold bull market. Say, whatever happened to all the stories about China demand, a China/India love trade, supply/demand capers on the COMEX and ‘US jobs to spur inflation driving big, smart institutional money into gold’ anyway?

(more…)

Bold Numbers

By -

Apologies for the very late post today. I had a morning appointment that overran badly, and it’s slower work getting charts done after the markets open and I’m then trading as well as charting.

I mentioned on twitter last night after the close that the bulls narrowly managed to avoid a 5dma three day rule breakdown with a target at a retest of the lows. There was more downside overnight that reached my ideal target on ES at a retest of the 1850 area and ES then reversed back up hard there. There is a strange myth that globex highs and lows always need to be retested soon after. I’ve been watching that for a while and have seen little evidence to support this, and there’s no need to see that here.

(more…)