By: Adam Hamilton, Zeal Intelligence LLC - 24 March, 2006
Out of all the major commodities-stocks sectors that are thriving in today’s commodities bull, oil stocks are probably the surest thing. While their ultimate returns won’t be as high as smaller high-flying sectors like precious-metals stocks, oil stocks have a vastly superior ratio of potential returns to risk. In other words, oil stocks are almost certainly the least risky commodities-stock sector in which to deploy capital today. This unique attribute of oil stocks is a product of several factors including the global importance and fundamentals of oil, the massive size and scale of the oil companies, and their unbelievably low valuations. Full Story
In a commentary on March 3, 2006, I argued a number of points about the proposed Barclays iShares Silver ETF, some of which were presented as being ironic or clarifications of widespread misunderstanding. Well, along came the SEC a couple days ago and approved the ETF, agreeing with the AMEX and seeming to render much of my argument as kibosh. The SEC Release approving the rule changes that will allow the silver ETF to trade on the AMEX can be found here. By the way, if you take the time to read these SEC comments, the only logical conclusion at which you will arrive is that the listing of this ETF is a foregone conclusion. Full Story
It is likely that the strength in the rest of the metals markets helped the gold market avoid a more significant correction this week. In fact, with the Dollar rising sharply and April gold falling below a series of critical chart points, we were fearful that April gold was poised to fall back to $540 in the action yesterday. In the early action today, the same divergence between gold and silver is present again and that suggests that gold isn't exactly back on a positive track. Full Story
Gold traded about a dollar lower in Asia and fell nearly $4 in early London trade before it rebounded to near unchanged in later London trade, but it then fell off even further in late London and early New York trade to about $545 before it rebounded for the rest of trade in New York and ended near its highs with just a 10 cent loss. Silver traded mostly slightly lower in Asia and London and briefly dipped near $10.40 in early New York trade, but it then rallied throughout the rest of trade in New York and ended near its highs with 1.72% gain to a new 22 year high. Full Story
I’m concerned about the ever-growing number of junior uranium companies. Over the past two years, the number of companies looking for uranium has jumped over 700%. At last count, there are now about 145 such explorers. It’s hard to arrive at an exact number since many companies only have uranium in their names. And others are actively exploring while still remaining primarily in other areas. Full Story
By: Theodore Butler & Howard Ruff - 23 March, 2006
Butler has convinced me that silver will not be just twice as profitable as gold in the next few years, but many times more profitable — maybe ten times more profitable. Silver is in huge short supply; the inventories are gone! Unlike gold, government can’t dump the silver in the market to artificially suppress the price because they have none. Silver is still the poor-man’s gold, and the time is not far away when it will be difficult to find any silver at any price short of $100 an ounce. Full Story
With gold’s bull-market correction now in its thirty-fifth day, investors in mining shares and precious metals are eager to know whether prices are likely to turn decisively higher any time soon. To save on guesswork I’ve reproduced a chart below of the Gold Bugs Index (HUI). It shows the precise location of four hidden-pivot supports, each capable of producing a dramatic turnaround -- or at the very least, a tradable bounce. Full Story
Apparently one analyst isn't the least bit deterred by the sloppy price action of the last two months, as the Press yesterday carried his projection that called for gold prices to be roughly 10 times their current value. However, in order for gold to avoid a $10 per ounce slide, in the coming sessions, and in the process giving off the impression of a top on the charts, it will have to get its fundamental and technical house in order. Full Story
Gold traded mostly slightly higher in Asia before it fell about $5 in London, but it then rebounded in New York and ended just slightly lower on the day. Silver traded as much as 10 cents higher in Asia and London before it fell in New York and ended near its lows with a loss of a penny to fall from 22 year highs. Full Story
In the last update gold was expected to break higher, but instead it went into a rather steep downtrend, which terminated at support at the February low and the Reversal Day high in December. A weak bounce has followed which has synchronised with a sharp drop in the dollar. As we will shortly see, the action in gold stocks suggests a continuation of the current corrective phase, and a strong probability that the support line at $535 will fail. Full Story
Silver has so far ignored the slowdown in gold and although it reacted instead of pushing higher as expected in the last update, it quickly made good the losses and it even managed to push to new highs last week. The question therefore arises as to how long silver can continue to forge ahead with gold going nowhere, and more particularly, if gold goes into an intermediate decline, as looks likely from its chart and especially from the charts of the gold stock indices. Full Story
While the April gold has managed to hold up around the critical $550 level, it remains vulnerable to liquidation in the wake of more gains in the Dollar. While the US Fed recently talked up the US economy, they also downplayed the threat of inflation by suggesting that inflation remains anchored at low levels. The recent Fed dialogue also undermined the gold market by suggesting that more rate hikes were ahead. Full Story
By: Chris Mullen, Gold Seeker & Tom Szabo, SILVERAXIS.com - 21 March, 2006
Gold traded about $1-$4 lower in Asia before it dropped even further in early New York trade to under $547 at one point, but it then rallied back to climb to about unchanged around $555 in early afternoon trade before it fell a bit into the close and ended a few dollars lower. Silver traded between $10.20 and $10.30 in Asia and London before it dropped to around $10.15 in early New York trade, but it then surged higher just before noon EST to about $10.50 as the SEC approved a rule change that will “allow the American Stock Exchange to list shares in Barclays Plc's iShares Silver Trust.” Silver backed off near $10.35 after the initial surge, but it then rallied into the close and ended near its highs of the session. Full Story
Either the USD is going off the board at some point over the next few years, or gold will complete its current terminal sequence and then be subjected to a significant correction in USD terms. Which is it? Well, if history is any guide, the correct answer is the USD will cease to exist in current specie. At the same time however, as with the fall of Rome, this could be a very lengthy process, with peak oil considerations possibly dictating the candor of decay not only in this regard, but of post hydrocarbon man as well. Full Story
By: Steven Saville, Speculative Investor - 21 March, 2006
In an article titled "The End Game" we explained why the inflation not only CAN continue, it MUST continue (regardless of the ramifications for the dollar and the bond market, the Fed has no choice other than to continue the inflation). However, for the current monetary system to remain in place for at least another decade the inflation can't continue in a straight line. Instead, there will have to be periods when deflation appears to be a clear and present danger in order to prevent the dollar's decline relative to hard assets from spiraling out of control and to pave the way for the next round of monetary largesse. Full Story
With little argument from anybody, gold has made a huge run since last autumn. Typically, in a strong bull market, most of the gains will be retained. Often a retracement of 3/8-ths of the gain from the breakout occurs into clear ground. In our case here, the gold upward path was painted by too many geopolitical brushes. Gold benefited from the monetary response to the natural hurricane disasters which persist. Gold was pushed by too many participants fed up with the bloated world currency, the most mismanaged currency in modern history, the USDollar, which fights the good fight in battling the inefficiencies of debt overhang and the threat of asset bubble dissipation. Full Story
While it would seem like the Chinese declines overnight were simply an extension of the weakness seen on Monday, we are a little surprised that comments from the Bundesbank didn't prompt some short covering. Apparently the German Central Bank indicated that they did not plan to sell any gold in 2006 and at the same time offered that gold remained "an essential Part of reserves". Countervailing part of the bullish fundamentals from the Bundesbank, is the news that Chinese gold production rose in January rose by 6.9% to stand at 15.79 tons. Full Story
Gold traded about $1-$2 higher in Asia and fell near unchanged in London before spiking down near $550 in early New York trade, but it quickly rebounded and remained near unchanged for most of trade in New York until a rally at the close brought it to close near its highs with a modest gain. Silver rose near $10.40 in Asia but also fell off in London and briefly dropped under $10.25 before it rebounded in New York and ended unchanged at a 22 year closing high. Full Story
By: Julian D. W. Phillips, Gold Forecaster - 20 March, 2006
We have heard the opinion that “Given that over 50% of the Bundesbank's foreign reserves are in gold (valued at market prices), there is a case for reserve diversification. Studies show that some gold in the portfolio does improve risk adjusted returns but the current holdings of the Bundesbank are excessive for this purpose”. We respect this opinion and see it as the present way of assessing gold in portfolios, even of Central Banks. But we also note the proviso in this statement, “…for this purpose.” Full Story
Despite what could have been considered very favorable developments overnight, the US metals markets are showing some disjointed early action. In fact at times early today, copper and gold prices were weaker, while silver and platinum were higher. After the US saw dampened inflation readings last week, seeing the German producer price Index rise to the highest level in 24 years should provide an underpin to prices to start the week. However, the metals markets could be somewhat undermined off expectations for a soft leading indicator report from the US on Tuesday morning. Full Story
Gold traded around $1-$2 lower in Asia but rose in London to come into New York slightly higher. Gold initially climbed above $557 but then dropped to about $552 before it recovered into the close and ended just a bit lower. Silver followed a similar pattern but remained higher throughout trade in New York and ended at a new 22 year high. Full Story
We are now standing at the precipice of the next METEORIC rise in this historical Gold Bull market. As before, the first Train to leave the station will be Gold miners who count their costs in non-US Dollar currencies. Full Story
By: Joe Ferrazzano, Trade The Cycles - 19 March, 2006
NEM, HUI, and the XAU hit 2% follow through Wave 5 minor intermediate term cycle buy signals on Tuesday 3-13 (see latest HUI 1 year chart), which indicates that Wave 4 bottomed on Friday 3-10-06. As occurred with the major upcycle's (since 5-16-05) Wave 3 minor intermediate term cycle high Elliot Wave nailed Wave 4's minor intermediate term cycle low (see NEM 4 month chart and latest 1 year charts). HUI bottomed well above it's prior major upcycle trendline segment, which indicates that the major upcycle since 5-16-05 has increased in strength. Full Story
With silver breaking to new highs, a lot of excitement is generated. Precious metals and related stocks are once again in the spot light, with many bullish analysis supporting a continued move higher. If you are a long term investor and truly committed, just close your eyes and buy. Because as you can see from the chart below, all those before you who had a terrible sense of timing and ended up buying at the exact tops in the past four years, are now profitable. Full Story
The XAU gold/silver index was basically unchanged after Friday's (Mar. 17) trading session, closing the day at 131.74. This gave the XAU a slight gain for the week, however, coming off that oversold extreme from the previous week. The Amex Gold Bugs Index (HUI) meanwhile closed the latest week at 302.43, slightly below its 15-day trend line and also slightly below the important 60-day moving average. Although HUI has so far managed to find support above its dominant interim 90-day moving average it is still struggling with the resistance at the 60-day MA and thus isn't completely out of the danger zone yet. Full Story
As of yesterday the Weekly MACD & SlowSTO indicators for the HUI still had not turned up, and were instead still pointing down. Now, who's to know whether gold still has more to the downside? With the G/S Ratio still strongly favoring silver (declining), will gold's price soon follow silver to the upside? Or, will silver pull back to a greater extent than gold, reversing the G/S Ratio to an uptrend? Full Story
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