By: Adam Hamilton, Zeal Research - 27 September, 2019
The bottom line is gold stocks’ setup leading into their October seasonal plunge is quite bearish this year. They recently enjoyed a major upleg, which left this sector very overbought technically and laden with greedy enthusiasm. That makes a healthy rebalancing correction necessary. Gold stocks have avoided that so far, generally consolidating high. But very-weak seasonals will add to mounting downside pressure.
When gold itself rolls over, it will drag the gold stocks with it. It has been very overbought heading into its own seasonal drop between its autumn and winter rallies. And with gold-futures speculators’ bets remaining excessively bullish, they have little capital firepower left to buy more but vast room to sell. That selling will ignite and likely snowball on the right catalyst, like positive US-China trade-war talk or Fed hawkishness. Full Story
The interplay between gold and silver is a critical component to understanding what is out ahead; to understanding whether long-term Treasury yields will rise and if they rise, whether it will be due to inflationary pressures. It is a critical component to understanding whether cyclical commodities and other aspects of a greater inflation/reflation trade will finally break existing downtrends. See… Full Story
By: Rick Ackerman, Rick's Picks - 27 September, 2019
Notice how the stochastic ‘overbought’ peaks recorded at the bottom of the chart rose in tandem with the Dow’s price peaks. Together they effect a series of non-diverging tops, a formation that usually implies that the trend will continue. Now notice how, when the stochastic peaks diverged relative to corresponding price peaks, the corrective moves that followed were steep and painful. Full Story
As the U.S. $100 bill transitioned from a Gold Certificate to a Federal Reserve Note now backed by $22+ trillion in debt, the look of the currency resembles more and more like Monopoly Money than real money. If you look at the little “yellow 100 numbers” printed all over the place to the left of Benjamin Franklin’s face, it almost looks like a child stamped those.
Over the past two decades, the percentage of $100 bills to the total Currency In Circulation has risen from 65% in 1998 to 80% in 2018. Which means, 80% of the value of Currency In Circulation out in the world is held in $100 bills. Full Story
By: Jordan Roy-Byrne CMT, MFTA - 25 September, 2019
There is a scenario in which Gold and gold stocks perform well even if Gold is not outperforming the stock market. We’ve experienced that this year as well as in 2016.
However, the larger point is Gold has to outperform the US stock market before it can enjoy a multi-year bull market and a new all time high.
In the meantime, precious metals have corrected as expected but are experiencing an oversold bounce. The correction has created new values and new opportunities in some companies. Full Story
I do not think Trump will be impeached. These kind of news will also be bullish for gold and silver. Investment demand will rise over the coming weeks and coming quarters. Economic data releases are not having any impact on bullion or the US dollar Index. Full Story
By: Stewart Thomson, Graceland Updates - 24 September, 2019
Goldman Sachs analysts have predicted that a major rise in volatility lies ahead for the stock market in October.
Gold has a long history of performing quite well in most of these situations.
Some gold investors tell me that they are worried about a repeat of 2008 for gold stocks. I have no concerns because in 2008 most money managers had never heard of QE or negative rates.
Now, they know the Fed stands ready to whatever it takes to provide liquidity to markets, regardless of how inflationary that might be.
Trump also stands ready to act. He’s the most pro-markets president in a long time, and arguably in the history of America. Unlike Obama, he’s not afraid to use the power that he has, and to use it pre-emptively.
This year marked the 30th anniversary of the Denver Gold Forum (DGF), the world’s most prestigious precious metal equities investment conference. The invitation-only event, held last week, was attended by an incredible seven-eighths of the world’s publicly traded gold and silver companies by production, as well as leading metals and mining executives, money managers, analysts and investors.
Much has changed in the precious metals and mining industry in the past 30 years, as we were all reminded by my longtime friend and mentor Pierre Lassonde. Pierre, as many of you know, is the legendary co-founder, along with Seymour Schulich, of Franco-Nevada, the first publicly-traded gold royalty company. What you may not know is that Pierre is also one of Canada’s most gracious philanthropists and currently serves as the chairman of the Canada Council for the Arts Board of Directors.
According to Pierre, annual global gold demand has exploded in the years since the first DGF was held. Demand grew more than fivefold, from a value of $32 billion in 1989 to $177 billion in 2018. Full Story
Gold, silver and the gold stocks as represented by the Gold Bugs Index (HUI) and the TSX Gold Index (TGD) enjoyed an up week. Gold gained 1% and silver was up 1.6%, while the HUI jumped 6.9% and the TGD gained 6.5%. Despite the positive week, we are not enamoured with what appears as a potential head and shoulders top forming on the gold chart. Volume tailed off this week even as the market rose. Not necessarily a positive sign. The US$ Index gained a small 0.3% this past week, but it too looks toppy. Normally that would be positive for gold but with a negative pattern forming on the gold chart we are somewhat suspicious as to what actually might happen. The US$ Index could still move higher to unfulfilled targets up around 100.80. Gold breaks under $1,490 and has potential targets down to $1,415/$1,420. There is some interim support at $1,480 down to $1,470. Below that the targets should be achieved. Full Story
By: Avi Gilburt, Elliott Wave Trader - 23 September, 2019
The pundits and the media were debating for several weeks leading up to the last Fed meeting about what the Fed was going to do and the effect they thought it would have on the market. And, it amazes that the great majority of the market does not realize how much of a waste of time these debates really are.
But, as I often note, many market participants and analysts are simply not burdened by the facts. If they really would review the facts of market history, they would learn that there is no one that can control the market. PERIOD. Full Story
Bloomberg’s Liz Capo McCormick writes that there is not enough cash on hand at major Wall Street firms to meet the funding demands of a market trying to absorb record Treasury bond sales needed to cover U.S. budget deficits. She adds that there isn’t enough liquidity and that there are deep structural problems in the money markets. The big catalyst causing the squeeze in repo liquidity is the big swath of new Treasury debt that settled into the marketplace just as cash left due to quarterly tax payments to the government. Full Story
I would like to start out by looking at the old ratio combo chart that has the GOLD:XAU ratio chart on top with the XAU on the bottom. I’m not going to go over all the details the ratio combo chart has, only to emphasize the 20 year 6 point parabolic arc which shows how gold had been outperforming the XAU until the small double top at 24.33 in late 2015. When the parabolic arc was broken to the downside in early 2016 that strongly suggested that it was going to be the XAU’s turn to outperform gold.
Initially, you can see the sharp vertical move down that broke the back of gold outperforming the XAU at 12.50. From the low in early 2016 the ratio had been building out the blue rising flag until the bottom rail was broken to the downside just 3 months ago in June. Since then the ratio has been in backtest mode to the bottom rail of the rising flag which looks like it could be coming to an end which shows up better on the weekly chart we’ll look at later.
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