By: David Chapman, Union Securities - 9 June, 2006
Investors may be in for a surprise when they open their May investment statements. For the first time in a while the markets had a down month. For the record, the Dow Jones Industrials (DJI) fell 1.7 percent, the S&P 500 3.0 percent, the NASDAQ 6.1 percent, the TSX Composite 3.8 percent, and the AMEX Oil Index (XOI) 2.7 percent. The worst performer was the Gold Bugs Index (HUI), down 12 percent. A number of the indices were down at important support zones and threatening to break through them, while the DJI also failed to take out highs seen in January 2000, leaving the potential for a massive multi-year double top. Shudder at the thought, as potential targets would be around 4,000. Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 9 June, 2006
Some of the most fascinating and amazing market action this year has occurred in the base metals. They have blasted stratospheric in mighty parabolic surges, exhibiting tremendous volatility that even dwarfs that of the stock markets. And now they are largely retreating in healthy bull-market corrections necessary to bleed off their earlier speculative excesses. Full Story
Apparently the ECB was a little more dovish than the market was expecting yesterday and that provided the Dollar with a huge upside extension and that moves continues to undermine the gold market somewhat in the action today. However, with the US equity market managing to recover yesterday and extend the gains a bit early today, it is clear that some of the outside market influences in gold have reversed course this morning from their conclusively bearish tilt yesterday. Full Story
If you were impressed by yesterday’s 200-point turnaround, don’t be. We’ve seen better rallies in an oncology ward. Considering the news – that one of the world’s deadliest terrorists has been silenced forever – we might have expected stocks to go wild. Instead, the Dow Industrials finished up just 7 points on the day, reversed not by the good news but by some regulatory safety switches that were thrown when stocks were freefalling earlier in the session. Full Story
By: Peter Spina, Gold Seeker Report - 8 June, 2006
The bearish developments stacked up at the beginning of the session seemed to intensify as the session progressed and with the stock market in a full washout, oil prices crumbing and the industrial metals under a wave of selling it is not surprising that gold fell through a series of critical chart support levels. We suspect that the ECB rate hike and the fear of an over tightening by the US Fed later this month contributed to the selling wave. Full Story
Apparently the gold market sees the death of the key terrorist in Iraq as a negative and with the Dollar apparently lifted as a result of the US military progress, it is not surprising to see the Dollar rise. With the Dollar rising to within close proximity to an upside breakout point on the charts, it would certainly seem like the US gold market will be confronted mostly bearish outside market conditions again today. In fact, with the stock market moderately lower and oil prices falling, there would seem to be a number of bearish outside market forces presented to gold this morning. Full Story
Of the speculative strategies you’re considering, being long gold seems somewhat less risky to me right now than being short the market. I explained here yesterday why I think gold’s next bull leg will be spectacular (and soon!). Full Story
By: Peter Spina, Gold Seeker Report - 7 June, 2006
Gold and silver also sold-off before staging a strong reversal near the end of New York trading nearly erasing all losses and even turning positive in the silver markets. This helped to reverse metal equities too yet we continue to see the general selling market pressures drag down the metal equities which sold-off nearly 3% (HUI) despite spending the mid-day session in positive territory. Full Story
Here we go again, gold to $1000 or $500? Both bull and bear camps have convincing arguments why they are right, and only one of them will be correct. The chance either way is 50/50, and a coin flip is equally effective. But we don’t leave our trading to chances. We trade on signals and set ups, manage our risk, then let the market do its work. We have been consistent buyers these past few years and have been richly rewarded. Does this sell signal indicate the end of the bull market? Full Story
I want to reiterate that the 599.40 target given here earlier not only remains viable; it is also the most likely spot I can discern for gold's next potentially important bottom. Accordingly, you can plan on bottom-fishing there with a 597.90 stop ($1.00 lower than the number given previously). There are other hidden pivots between here and 599.40, but I've flagged only one to keep it simple. Alternatively, it would take a 681.60 print by Wednesday to decisively end the correction from $732. Full Story
While the Dollar is higher again today and applying some pressure to the gold market, the trade is suggesting that the Dollar upside might be set to slow now that the trade is mostly convinced that the Fed will hike rates at the end of the month. With the equity market only marginally lower overnight and energy prices mixed, the gold market is only partially undermined by the macro condition, but with the copper market still in a liquidating posture, it seems like the potential for more general commodity fund selling remains in place. Full Story
By: Peter Spina, Gold Seeker Report - 6 June, 2006
The gold market seemed to be off on a bad foot to start and as the session progresses it seems that a number of outside markets added additional pressure to the market. As in other markets the residual of Bernanke comments seemed to weigh on prices and the slightly softer economic views of other Fed members simply seemed to turn up the liquidative heat on gold. Certainly a sharply higher Dollar and expectations of even more gains in the Greenback was cause to push prices through a series of key chart support levels. As was suggested in the mid day comments the pressure in the rest of the metals markets, the equity market and the energy complex simply made the environment ripe for selling a number of physical demand driven commodity markets. Full Story
In conclusion, it appears that we are in a period of uncertainty. Breaking 400 on the HUI should confirm the idea of filling the channel and bring the 460 target back into play. (Note that with the formula provided at the beginning of this paper, the 460 target corresponds to a gold price of about $810/oz.) Barring the setting a new high in the HUI, we may have entered into a period of consolidation. Full Story
As of tomorrow, Russia will accept only rubles for its oil and natural gas, and in a month or so Iran and others who use its Euro Oil Bourse will take only euros. These changes have enormously bullish implications for gold, for reasons I shall explain, but catastrophic implications for the U.S. and global economies. For Russia and Iran themselves, it will amount to shooting themselves in the foot, although the economies of both of these countries are so robustly cockroach-like that they will probably still be able to hop along, missing a foot, without too much trouble. Full Story
While the Dollar is only marginally stronger against the Euro this morning, the negative impact on gold and the rest of the metals markets seems to be pronounced. However, despite the big overnight declines in gold, we suspect that early strength in oil and equities this morning are serving to countervail some of the initial selling pressure. On the other hand, copper and platinum prices have been showing periodic vulnerability and that has in the past hinted at broad based commodity selling interest in the precious metals. With the US Fed Chairman acknowledging slowing in the US yesterday but also hinting at a clear desire to stay on top of inflationary pressures, it is not surprising to see the bear camp in gold gain the upper hand in the action today. Full Story
A brutal day on Wall Street with the DJIA just shy of a 200 point decline and quickly closing on the 11,000 mark. Opening slightly lower on ongoing concerns including the near-record oil prices, selling was exacerbated when Federal Reserve Chairman Bernanke warned that the central bank will continue to raise rates until price inflation is under control. This took equity and bond markets south, dragging metal equities along with it. Full Story
What are the chances of gold not marking out an A-B-C correction as described here and simply storming ahead to new highs? While such a development would be very unusual at this stage, anything is possible in markets and we cannot rule out the prospect, although fundamentally it would probably take something like a sudden worsening of the Iran situation (by, for example, Israel carrying out air strikes) to generate such a move. Full Story
Just as you don’t stop a speeding 100 car train and set it going in the opposite direction at the same speed in a split second, it times time to bring a powerful uptrend to a halt and turn it into a downtrend. A reversal pattern is believed to be forming in silver that looks set to generate a downtrend, although here it must be emphasised that this is an intermediate reversal, not a long-term reversal, and so the larger uptrend should eventually reassert itself, once the corrective phase is complete. Full Story
The current gold price correction has probably been completed in terms of price magnitude but the correction may not be completed in terms of time duration and complexity. The next upleg should take the gold price above $800 with only two minor corrections (of the 4%-6% variety) on the way, but only after the present correction is complete. After the peak above $800 has been reached, the most severe correction of the bull market thus far should occur. Full Story
The Dollar came within striking distance of the May lows this morning and is largely supporting gold into the US opening even though the Greenback has bounced away from its lows. With Crude Oil prices rising above $74.00 overnight and gasoline prices apparently leading the way to even higher prices ahead, the gold market seems to be getting renewed flight to quality buying interest. However, overnight one Press outlet suggested that gold was seeing some buying interest from funds moving from oil into gold. Full Story
Gold fell to under $620 at one point in Asia, but it rose to above $630 in London and furthered its gains in New York to close with a gain of 1.29%. Silver dropped near $11.75 in Asia before it moved back above $12 in London and closed with a gain of 1.6% by the end of trading in New York. Full Story
There was another recommendation in Friday’s Touts, to short the mini-Dow at 11336, and although I’d have bet a shot-and-a-beer that it would be reached exactly, the actual intraday high was only 11322. It is usually a sign of impending weakness if a rally reverses without achieving so modest a hidden-pivot target. However, in this case we’ll give the undecideds the benefit of the doubt when next week begins, since they seem to be ruling the market these days – with a pot-metal fist. Full Story
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