I most often use linear scale charts for stocks, markets and indicators for their more absolute views. But in the case below we conjure up a long-term log scale chart showing the Gold/Silver Ratio (GSR) and the S&P 500 (SPX), as it works better in providing a percentage-based relationship between an indicator of market liquidity and inflation when declining and lack of liquidity, deflation or… it has to be said, Goldilocks, when rising. Full Story
By: Rick Ackerman, Rick's Picks - 24 January, 2020
The buy-the-dips mentality has become so entrenched over the last few months that it’s hard to imagine what could possibly derail the bull market. Wall Street feigned mild concern for a few hours over the spread of a deadly virus in China, but absent news that Americans are keeling over dead from it in their back yards, we can expect the broad averages to forge ever higher. The uptrend has been so relentless that it has come to practically guarantee a quick return for any investor who jumps aboard on a given day. In no instance during the last three months has any bull suffered a third straight day of losses. Full Story
The precious metals sector remains in a correction, and as long as the 200-day moving averages hold, a bullish consolidation that began last September.
Sure, Gold made a new high and is still holding around the previous high, but the rest of the sector has not confirmed that strength. When Gold is outperforming Silver and the gold stocks, it is not a bullish signal for the short-term. Full Story
In part 2 of this Important Inflection Point For the PM Complex, we’ll look at some US dollar charts along with a few important currencies of the world. I don’t have to tell you that the US dollar can play a very important role in how the PM complex and commodities in general may perform. Even though it’s never a perfect correlation important turning points can appear very close to the same time. We’ll start with the short term charts and work our way out in time to the very long term charts. Full Story
Safe haven demand (due to Chinese corona virus) is supporting gold. I expect a rise in Chinese gold demand during the Chinese New year, if the virus is not contained in the next two weeks. Chinese economy will see a short term hit. More and more Chinese will buy gold out of fear. It is the fear of the unknown that will drive more and more people to gold. Full Story
And what might that chart be telling you? That the LBMA/COMEX pricing scheme for palladium may be on the verge of collapse. And if the pricing scheme for palladium collapses, how long might it be before gold and silver investors worldwide—of whom 99% trust The Banks to hold their unallocated accounts and custody their metal—begin to doubt the ability of The Banks to fulfill their promises of delivery? Full Story
Short term investment demand in gold and silver can fall on expectation that Chinese physical gold demand will be lower. I am not worried if gold and silver correct. It is wait and watch 31st January for all metals. Sharp two way price moves like yesterday can happen daily. Trade carefully. I am not sure if economic data releases will have any impact on metals, energies and currencies. Focus will be on European central bank meeting tomorrow. Full Story
Does all this mean that investors in the sector should suddenly rush for the exits? No, it doesn’t, especially as the charts for many individual stocks across the sector look very bullish, and it may be that all that is needed is a cooling period of consolidation. However it does make sense to use Hedges at extremes, such as leveraged inverse ETFs and better still options as insurance, which have the advantage of providing protection for a very small capital outlay, a fine example being GLD Puts which are liquid with narrow spreads. We did this just ahead of the recent peak when Iran lobbed a volley of missiles at Iraq. We will not be selling our strongest gold and silver stocks, but instead look to buy more on dips. Full Story
- Iran-backed rebels may be seeking revenge for US meddling. They just staged an attack on Saudi-backed Yemeni soldiers.
- As long as the US stock market continues to rise, Western mainstream media won’t want to rock the boat with anything more than minimal coverage… of what is obviously the most horrifying humanitarian crisis on Earth.
- Clearly, gold investors have a different view of the situation. Full Story
By: Rick Ackerman, Rick's Picks - 21 January, 2020
My perspective is somewhat different and uses the Hidden Pivot Method to extrapolate a breakout at exactly $3.12 per pound. Any higher, especially if the futures can close for two consecutive months above that price, would be very bullish. But even someone with no knowledge of technical analysis can see that all signs point higher, with many uptrends of varying degree in play simultaneously. My technical runes say that a strong breakout to the upside would have the potential to push the price of a pound of copper as high as $5.33. If so, the corresponding inflation we might expect to see in the price of goods and services would be severe and a jolt to the global economy, especially since inflation has lain dormant for nearly 40 years. Full Story
The IMF now sees growth at 3.3% this year, down from 3.4% and also cut the 2021 forecast to 3.4% from 3.6%. Yet it still lifted the outlook for China to 6%. Slower growth rates imply lower interest rates. Low interest rates along with high inflation will result in continued rise on gold investment demand for the rest of the year. If gold price rise sharply and silver lags, then retail investors will opt to invest in silver. Silver just needs to break that all important $20.00 resistance. Once silver breaks past $20.00, then $30.00 will be there much sooner than most of us expect. Full Story
We are living in economic, financial and monetary environment that I never thought possible in this or any other lifetime -- and I expect you feel the same way. All sense of free markets have been swept away -- and the central banks of the world, particularly the Federal Reserve, are now handing out hundreds of billions of dollars very week to Wall Street and foreign banks just too keep interest rates low -- and the equity markets moving ever higher.
I used to be quite amused years ago when I heard that "print, or die" expression, but now that we're permanently in it, I'm not smiling anymore. As you've already figured out, the moment they stop, the entire system crashes and burns.
This current melt-up in the stock markets can't and won't last forever -- and they can't keep interest rates suppressed forever, either. There's a limit, which we obviously haven't reached yet, where these central bank actions will show up in inflation and currency debasement, which I very much think is part of their plan... Full Story
Now for silver, which reached the fabled Hunt Brothers bubble high of 1980. Why, it was going to its next stop at 100/oz. and beyond, maybe even on par with gold (little brother Palladium has become Platinum’s daddy after all). Silver was a bubble in the spring of 2011 as Bill Gross shorted long bonds because… INFLATION!!! among other hype making the rounds at the time (of inflation’s dramatic blow out). A big time volume surge accompanied silver’s final drive to 50. Full Story
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