By: Scott Wright, Zeal Intelligence LLC - 3 March, 2006
There is no denying we are in the midst of a secular commodities bull market. Precious metals and energy have commanded the lion’s share of attention not only on the contrarian front but from mainstreamers as well. But bobbing to the surface in this sea of commodities, base metals have recently garnered the spotlight. Full Story
The stocks within the junior exploration sector have recently become influenced by a new mind-set. Earlier in their Bull Market these companies were affected by two primary factors. The first was the price of gold. The yellow metal struck its Bear Market $252.50 low in August,1999. After displaying an initial burst of strength it again declined and posted a double bottom at $255 in early 2001. It has since doubled in price and, until now, the junior stocks have tended to mirror gold’s price action. Each yellow metal up-wave saw a delayed overflow of excitement enter the juniors moving them higher in price, while each gold set-back made their stocks whither. Full Story
At GATA's Gold Rush 21 Conference, held in the fall of 2005, precious metal advocates discussed strategies to promote gold and silver. (See goldrush21.com.) Among the best silver money ideas are Hugo Salinas Price's silver coin movement in Mexico, the Liberty Dollar, and New Hampshire's Silver Coin ballot measure, but none of these, I feel are ideal. From what I have learned about the importance of using honest weights and measures as taught in the Bible, (unjust weights and measures being described as abominations) I have developed this Silver Coin Proposal. Full Story
This past week as been perplexing for out-of-the-market gold stock investors, for sure. And I think I know the reason why. The HUI (Gold Bugs Index) to an ever increasing degree has become the flagship thermometer index of gold stocks, whether the "market" is going up or going down. Investors were able to assess their risk with this benchmark. If the HUI had completed investor-defined technical analysis hurdles an investor would conclude whether to get into the general gold stock market or exit. Customarily, the components would liftoff or recede as a group, albeit at different rates of appreciation or decline. But, recent performance seems to have dashed this past group behavior. Why so? Full Story
The proposed Barclays silver ETF, like all other ETFs, will be actively manipulated in order to keep share prices tightly tracking the spot market. But because the silver ETF has the potential to overwhelm the spot market, which is relatively small and devoid of available stockpiles, the SEC is unlikely to approve it as currently drafted. Full Story
So after a quarter of a century, silver finally returned to double-digits. While we aren’t fans of following day-to-day moves, the recent zoom past the $10/oz mark is noteworthy. It seems that the precious metals community is anticipating the launch of the silver ETF – so perhaps this is what is causing the grey dog to bark. Maybe that’s the case, but we certainly don’t think that abnormal amounts bullion are being gobbled up by Barclays in anticipation of the ETF’s launch. Nor do we think that the public is suddenly hoarding silver. Full Story
From our perspective, the gold market continues to lag behind silver and with the Dollar showing significant weakness yesterday, we would have expected an even more impressive run up in gold prices. However, seeing the market manage new highs for the move has served to reverse the negative sentiment that was in place at the beginning of the week. In fact, with April gold managing to climb above the $570 level in the last 24 hours, it would seem like the trade is attempting to establish a higher trading range. Full Story
Gold traded slightly lower in Asia and found minor gains in London and morning New York trade before it surged higher into the close and ended near its highs of the session with nice gains to come within just $3.90 of its 25 year closing high of $572.20 set on February 2nd. Silver also traded slightly lower in Asia and found minor gains in London, but it then gained about 15 cents in morning New York trade before it exploded above $10 in afternoon trade and ended near its highs with a gain of 4.21% to make a new 22 year closing high. Full Story
We just returned from a nine day trip to China. Having spent a few days in Shanghai, a day in Guangzhou and the rest of time in places less traveled, including two silver projects, we had some ideas that we’d like to share. Normally we stick to silver in our writing, but this time we felt compelled to stray if just a little bit. Then again, as you will read below, silver is such a unique metal, such an integral part of our lives that in any type of development in modern society will have a “silver angle”. Full Story
So far the ride in Gold and Silver has been enjoyable. What needs to be remembered, though, is that the good part is still out there in the future. The global shift away from paper assets to real assets is in infancy. Puberty has barely arrived. Denial is still too widespread among the majority of investors. Individuals remain doubters that the Real Paradigm will reign investment supreme in the years ahead. Full Story
As a preface, the Iranian Oil Exchange will not set up shop in March 2006. The exchange for Central Asian energy product sale, will not go into operation, will not come to pass, at least not anytime soon, and certainly not this month. My reliable sources traceable to London tell me that Iranian mullahs and clergy entrenched in high office have decided they do not wish to relinquish their corrupt siphon from vast energy sales into their personal accounts. Full Story
Taking all of the above into consideration we can say that a BALANCED commodity portfolio should have exposure to all MAJOR hard asset classes. That would be Energy, Metals and Agricultural type commodities (which is a topic by itself). However, these asset classes don’t perform at exactly the same time. In fact we can and did go through long periods of out-performance of one asset class over another. Full Story
The gold market was partially emboldened by the price action on Wednesday, as the upside extension put the market into a technical breakout. The upside move wasn't just important from a technical perspective, but it also served to shore up fundamental sentiment, which had recently begun to slump in the wake of the sustained February washout. In addition to muted inflation fears, generally weaker oil prices throughout February and persistent news of rising gold production, the gold market also saw a run up in the Dollar. Full Story
Gold remained mostly slightly lower in Asia before rising a bit in London, but it then dropped near unchanged in early New York trade before rising to over $565 by late morning. Gold then again dropped back near unchanged on the day, but it was able to rebound into the close to end a couple dollars higher. Silver followed a similar rollercoaster ride but sold off into the close to end unchanged on the session. Full Story
It’s the end of February, 2006, and copper is square with its all time high. 26 years is ancient history to the majority of the public and their advisors, so the conditions are right for another economic freak show. Will history repeat? Just wait and see! Full Story
Almost two months ago, I wrote about Barrick Gold’s large gold short position and growing hedge book losses, before their quarterly and year-end report was issued - "Lessons Learned?" I anticipated large derivatives losses. On February 22, Barrick did report their earnings and no word of loss appeared in any of the dozens of news reports that covered the story of what is now the largest gold miner in the world. Instead, Barrick reported a quarterly profit of $175 million. Many people wrote me, asking how I could be so wrong. It’s no fun for an analyst to be accused of being wrong. Especially when not only you are not wrong, but were right on the money. Full Story
Gold bulls had a great run in the past few months, and those of us who participated in the latest up cycle have taken partial profits while maintaining a core position for the long term. I believe this is a smart thing to do, it is a win/win situation because if price continues up, our portfolio grows, and if we correct substantially, we can put some cash to work. Full Story
Both London and Tokyo gold opened higher in response to the gains forged in the US session on Tuesday and therefore the bias has apparently shifted back toward the upside. We still doubt that the gold market will see a full return to the type of concentrated buying interest that was present in the November through early February time frame, but nonetheless the path of least resistance does seem to be pointing upward again. Full Story
Gold and silver traded marginally lower in Asia before they rose a bit in London and then gained throughout most of trade in New York to end near their highs of the session with over 1% gains. Gold and silver equities started off near unchanged but soon fell about 2% before rebounding to near unchanged midday, but they then fell back off into the close and ended over 1% lower despite greater than 1% gains in the metals. Full Story
By: Julian D. W. Phillips, Gold Forecaster - Global Watch - 28 February, 2006
What should we conclude from this? Gold’s performance against all currencies points the way, showing that the straight comparison of one currency against another will not suffice to point to or even explain a currency’s performance. Exchange rates come back to the single fundamental of demand and supply at the time the exchange rate is being priced. Full Story
By: Rick Ackerman, Rick's Picks - 28 February, 2006
But Pimco believes Bernanke will soon recognize signs of an economic slowdown and change course. Accordingly, the firm has been buying short-term paper in anticipation of a possible easing rather than tightening by year-end. In the interest of helping the Fed chief see the gathering clouds, we proffer the chart below, from our friend Bob Bronson at Bronson Capital Market Research. It shows a housing boom that is clearly spent and starting to roll down. Our bet’s on Pimco. Full Story
While the gold market has managed to bounce slightly off some favorable currency related action in Japan, we still get the sense that the market is off balance. With news that Newmont Mining saw a decline in its 4th quarter profitability and Russia indicating yesterday they might be able to increase gold production by 50% over the coming 9 years, we can understand some of the positive investment buzz dying down in the gold market. Full Story
Gold fell off a couple dollars in Asia and remained near $556 in London before it dropped another few dollars at the New York open and remained near its lows for most of trade, but it did rebound slightly at the close. Silver started off slightly higher in Asia before it dropped a bit in London and then furthered its losses in New York, but it also rebounded off its lows near the end of trade. Full Story
The XAU gold/silver index closed the latest week at 140.51, relatively unchanged for the week but above its low from last week. Also, the XAU closed just barely above its 15-day moving average for an early sign that just maybe a short-term bottoming process is already well underway. The Amex Gold Bugs Index (HUI) closed more decisively above its 15-day MA on Friday and finished the week at 320.64. Full Story
By: Joe Ferrazzano, Trade The Cycles - 27 February, 2006
It still looks like Wave 4 (see NEM 1 month chart, third chart) will be a 6 weekish Elliot Wave ABC correction, since NEM's Wave A short term downcycle lasted 9 sessions, from 1-31-06's Wave 3 cycle highs until 2-13-06, HUI/XAU's lasted 11 sessions, from 1-31-06's Wave 3 cycle highs until 2-15-06, and the Wave B short term upcycle is still in effect at 2-24's close. The major upcycle (since 5-16-05) Elliot Wave count (1 year NEM charts have clearest count) correctly indicated that Wave 3 ended on Tuesday 1-31-06. Full Story
Surprisingly Chinese spot gold was higher overnight and that apparently didn't provide the US gold market with much of a lift. In fact, with a steady stream of higher 2006 gold production dialogue filtering through the market recently, we detect a partially negative bias to start the week. Certainly the market saw some support in the Asian action from last Fridays events, ongoing Middle East anxiety and the protests in Indonesia, but with the Dollar showing signs of strength and more talk about higher gold production ahead, we suspect that part of the physical buying interest is being countervailed. Full Story
Gold and silver investors were excited to see precious metals finish on a positive note for the second consecutive week. Gold closed on Friday at $558. Silver finished at $9.70. The silver market outperformed both gold and precious metals stocks. Gold stocks put in a solid performance this week to record another marginally bullish candlestick in the weekly chart. Full Story
Let's not beat around the bush. The next target for the HUI is 425, which should be reached by April 20, 06. Now let's digress a moment and discuss exactly how to interpret this admittedly bold statement. Is it investment advice? No. Is it an absolute truth? No...rather it is a conclusion drawn from the analysis below. Additionally, it is this author's interpretation of what he feels is the highest probability outcome for medium term HUI performance. Full Story
The gold market has been drifting for the past few weeks as it consolidates its recent gains. After a brief flirt with the $535 support the gold price has rebounded back above the recent $555 resistance. Its Friday night push in the US above this $555 resistance has triggered the start of another bull trend and signals the end of the recent correction. Full Story
Gold started off lower in Asia, but it soon rose above $550 and held slightly higher in London before it gained throughout trade in New York and ended near its highs with a 1.75% gain. Silver remained near unchanged in Asia before spending most of trade in London and New York around 1% higher, but it then spiked higher in the last few minutes of trade and ended with a 2.32% gain. Gold and silver equities rose throughout trade and ended at their highs of the session with about 2.5% gains. Full Story
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