By: David Smith, The Morgan Report - 22 November, 2019
So don't wait to act until the obvious is well under way. Get yourself positioned to play the long game and the Big Move.
As Nick Barisheff succinctly puts it, “The small minority of wealth preservationists will sleep well with their physical gold and silver, whilst the majority of the asset management industry are likely to have nightmares for many years.”
Act soon to acquire enough physical gold and silver so you can sleep well, counting your Maple Leafs and Silver Eagles, while others are counting sheep... or sitting up in bed with a bad case of FOMO – the Fear Of Missing Out. Full Story
Many people feel that the metals are too hard to trade. Personally, I view them as much easier to trade since they are a rather pure sentiment trade. And, they have acted almost perfectly within our expectations of late.
On Friday, one of our members pointed out to me that the GLD fund has seen its largest withdrawal since late 2016. And, as we now know, that was right before the metals bottomed and began a rally. While we may still see some weakness over the coming week (which was also the case in 2016 after the withdrawal extreme), I think we are getting close to starting the next rally phase in this complex. Full Story
Next week is a thanksgiving week. There will be a position squaring and rebuilding on two counts. (a) Gold, silver and copper comex December futures are expiring. (b) Traders will look to book some profit in their open positions. In my view, at the moment, there are more long positions than short positions in gold and silver. Full Story
By: Stewart Thomson, Graceland Updates - 20 November, 2019
- My base scenario for 2020 is that the US economy muddles along, Trump doesn’t launch any more significant tariff taxes, and the Fed is likely to step in and keep the stock market boats afloat if they start sinking again.
- My base scenario sees gold and related items again outperform all other major asset classes in 2020, but with the bull wedge pattern on the weekly chart becoming more of a gentle reactive drift.
- I give that scenario 70% odds, leaving a 30% chance that in three weeks Trump hikes tariffs, Powell does nothing, the stock market crashes, and gold stages a vertical blast towards $1900. Full Story
A couple of weeks ago, I was in Lima, Peru, attending the Mining & Investment Latin America Summit. I heard from a number of industry leaders that mining in South America has become more challenging in recent years. One of the biggest reasons why is that the burden for taking care of local communities has, in many cases, fallen on the miners’ shoulders. Venezuela’s corrupt socialist president Nicolas Maduro continues to destabilize and finance radicalism throughout the continent using revenue from narcotics, and mining companies often end up having to pay the price.
Chilean lawmakers, for instance, are considering a new tax on mining and mineral extraction to address the country’s social unrest I described earlier.
As you can imagine, this could discourage speculation in the junior mining area.. Full Story
The gold price was under quiet but extremely erratic selling pressure in Far East trading on the their Friday -- and the low tick of the day, such as it was, came around 9:15 a.m. in London. It crept quietly and unevenly higher until the 11 a.m. London close -- and at that juncture 'da boyz' in New York would not allow it to go any higher -- and it traded very unevenly sideways until the market closed at 5:00 p.m. EST.
The high and low ticks certainly aren't worth looking up.
Gold was closed on Friday afternoon in New York at $1,467.90 spot, down $3.30 on the day. Net volume was pretty quiet at just under 212,500 contracts -- and there was 39,500 contracts worth of roll-over/switch volume out of December and into future months. Full Story
Gold prices are down from recent highs, but that doesn’t mean investors are giving up. Open interest is still rising, showing that lower prices are driven by new short-sellers rather than by long investors liquidating. Another potential catalyst for the yellow metal is President Donald Trump pushing the Federal Reserve to deploy negative interest rates, which are positive for gold. Full Story
The suspense continues. US stock markets continue their record run but also continue to bump up against the top of a potential broadening channel. So we could still fail here. Or we bust right through. The third scenario is a pullback, regroup then bust through on a record run.
Despite signs of global slowing we have a president who wants the economy growing, the stock market rising and a trade deal with China before the 2020 election. A year is a long time in politics and markets. A lot can happen. Recession spreads are positive again after a period of being negative. But in past experience it was the recession spread turning positive again following a period of being negative that brought a recession closer to fruition. Gold rose as the U.S. dollar faltered. Is gold's correction over?
Our chart of the week looks at derivatives, what they are and how much is really at risk.
With stock markets poised to breakout to the upside what will it be? Burst through or falter? Full Story
On November 4 authorization for traders on the New York Commodities Exchange to use "London gold" and Comex gold warrants as collateral was tripled, raised from $250 million to $750 million. HSBC now has used $340 million, or 45.3 percent, of its new collateral limit. It seems more than coincidental that HSBC took advantage of the collateral increase so soon after it was put into effect.
I see the rule change as a low-grade bailout of HSBC, analogous to the Fed's low grade bailout of the big banks with the "repo" "quantitative easing." The rule change also flags HSBC as the largest trader in the commitment-of-trader category that designates the percentage of the long and short contracts held by the four largest traders on the Comex.
Assuming, as is likely, that HSBC's short position was largely put on at lower gold prices, the bank is probably getting hammered with a mark-to-market loss. Full Story
There is one last point I would like to make on this chart which I have absolutely no idea if it will play out. Note the center dashed mid line that runs though the center of the uptrend channel. For the most part the price action has traded in the lower channel below the dashed mid line. Back in 1995 the price action broke out above the center dashed midline for the first time which began the acceleration phase or parabolic run into the 2000 top. Looking at the current price action you can see the red consolation pattern that has been forming just below the center dashed mid line for over a year now. Is it possible we could see an acceleration phase to the top rail of the major uptrend channel before our current secular bull market runs it course? That one year red trading range with the price action currently breaking out is strongly suggesting the center dashed mid line is going to give way. Have a great weekend and all the best…Rambus Full Story
Gold ended the week higher but downside bias. Daily gold chart is neutral. $1,430's should see strong support if there is a larger sell-off. $1,487 area is initial resistance area..
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