The bottom line is gold is at high risk for a major selloff today. Speculators’ gold-futures positioning has grown excessively-bullish, leaving their buying firepower largely exhausted. That leaves vast room for big selling to snowball on the right catalyst. This bull’s prior episodes where specs had similar really-high longs and really-low shorts heralded major gold corrections. Extreme bets must eventually be normalized.
Such corrections are normal and healthy within ongoing bull markets, rebalancing sentiment to ensure longer lives with greater ultimate gains. These corrections should be embraced, as they yield the very best opportunities to buy relatively low within powerful bulls. Gold’s current bull is likely to run for years yet, so gird yourself for a major selloff and be ready to buy back in aggressively once it has largely run its course. Full Story
By: Chris Waltzek Ph.D., GoldSeek Radio - 12 July, 2019
- From his Thailand office, Dr. Marc Faber, a globally renowned economist and editor of the GloomBoomDoom report, returns with his outlook. - According to Dr. Faber, the global economy is on the cusp of a recession. Investors are advised to batten down the hatches. - A global / domestic economic maelstrom of epic proportions where paper assets denominated in the reserve currency lose up to 80% is possible. - Few asset classes will endure the economic storm ahead, however, safe havens include gold, silver, PMs shares and cryptocurrencys. - Despite the remarkable increases in modern productivity given quantum leaps in access to technology and information, living standards are sagging. Full Story
While the willingness to abandon long held beliefs for political gain has always been a common trait among public figures, the spectacle has recently taken on shocking levels of casual audacity. The contempt for even minimal levels of intellectual consistency has allowed Kamala Harris to condemn Joe Biden for his past opposition to Federally mandated busing while simultaneously taking the exact same position herself. These somersaults are particularly common with former economic conservatives seeking to curry favor with President Trump's decidedly non-conservative policies. Full Story
In June, the gold price finally broke above the $1,400 level after five long years. So, who was responsible for pushing the gold price to a new high since 2013? Well, if we look at the data, it most certainly wasn’t the physical gold investor. And, according to several dealers I spoke with, physical gold retail investors took advantage of the $1,400+ price to sell metal rather than be big buyers… which I found quite interesting.
However, if we understand the psyche of the smaller retail investor, it’s not all that surprising. The retail physical gold investor tends to buy more metal when there is fear, financial instability, or extreme price volatility in the markets. So, if it wasn’t the physical gold investor responsible for the $1,400+ price move… then who was? It was the Paper Gold Buyer. Full Story
By capitulating when U.S. prosperity is at flood tide, the Fed chief looks like a wimp and a patsy. He will be judged even more harshly by posterity if he is still in the driver’s seat when America’s long expansion ends. Powell could say things now that might help him save face later: "The economy is strong and looks like it will need no help, but we will certainly keep our options open." Full Story
Trend for gold and silver is bullish. Interest rate cut towards the end of the month has been confirmed by the Federal Reserve chairman. If gold rises very sharply till Monday, then value based buying in silver should catch and there can be some rise. I am quite confident that silver will break free from the recent consolidation phase by next week. Full Story
In gold, the commercial net short position blew out by another 26,672 COMEX contracts, or 2.67 million troy ounces of paper gold.
They arrived at that number by adding a piddling 54 contracts to their long position, but added a staggering 26,440 short contracts -- and it's the difference between those two numbers that represents their change for the reporting week.
To my surprise, under the hood in the Disaggregated COT Report, the Managed Money traders made up only part of the change, as they added 9,268 long contracts -- and only reduced their short position by 7,078 contracts. It's the sum of those two numbers...16,346 contracts...that represents their change for the reporting week. Full Story
Legendary investor Jim Sinclair and his business partner Bill Holter say Gold is going much higher. It’s a mathematical certainty. Sinclair says, “You need to look at gold, not a speculation, but as a savings account. If the dollar gets sliced in half, you basically double the value (of your gold) if not more. I think much more. . . . In the second reset, that will take gold to a price where it will balance the ability to pay global debt. That’s the major move coming forward. Right now, we are definitely going back to the $1,850 and $1,925 area per ounce for gold. The second reset, you can pick any price you want for gold. Pick a high price.” Full Story
By: Stewart Thomson, Graceland Updates - 10 July, 2019
- I would not do any serious selling until GDX arrives in my second target zone of $38-$40. The main driver of a rally to that target zone will be a concerning rise in inflation that occurs as US corporate earnings and GDP growth continue to soften. The bottom line: Fed doesn’t need to cut nominal rates to make real rates fall in that situation. All it needs to do is…nothing! That’s because a rise in inflation with no change in nominal rates is a cut in real rates.
- The bottom line: I expect an institutional money manager stampede into GDX and key individual miners will occur later this year as stagflation rises to essentially become… a Grim Reaper made of gold! Full Story
It’s not unusual for an annual rally in this volatile sector to produce a doubling of the majors’ share prices. For the more speculative juniors, gains can often be measured in multiples of 100%.
When things are going their way, there is no better sector than mining stocks for spectacular profit potential. When things aren’t, miners will burn investors far worse than any broad market index fund ever will. Full Story
When I set out in this trade back in November, I outlined that my ideal target from the 113 region would be the 135/136 region. While there is even potential for this rally to continue on to the 138/139 region, I will be cashing in my longs on the next move higher, as the heart of the rally I expected back in November has almost completed. And, while the market can certainly head higher than 139 (and I will reassess the structure once we do begin to move higher), I do not want to be a pig. I will gladly cash in my 20% return and look for another place to deploy the cash, preferably in the stock market. Full Story
There is now a very small section of traders and investors who believe that interest rates may not be cut in end July FOMC meet. Federal Reserve chairman’s testimony will clarify on the interest rate cycle. In my view interest rates will be cut this month by 0.25% or something lower as a token and thereafter it can be long pause. Incoming US economic data releases will also determine the interest rate cycle of USA. Full Story
Another week of record highs. It is all playing out against the backdrop of a slowing global economy and rising trade and currency wars. And that is despite the so-called rosy jobs report that came out on Friday in the U.S. (see Chart of the Week). Gold is taking a needed breather but still looks higher. Stock market indicators are mixed with some suggesting higher while others are suggesting caution. Bond yields also ticked higher following the job numbers and thoughts of a Fed rate cut softened.
Our recession watch spread narrowed this week following the release of the June job numbers. While our traditional 2 year-10 year spread narrowed most others remained negative. In Canada the 2 year-10 year spread did turn negative. Still a reminder that the spread can remain negative for months before a recession strikes.
We believe we are approaching a top in the market so some caution is suggested. But gold should soon resume its upward trajectory. When things are deteriorating markets turn to the safety of gold. Full Story
Some big names are backing gold this week—veteran investor Mark Mobius is one of them. As reported by Bloomberg, Mobius says that gold is set to push higher, potentially topping $1,500 an ounce, as interest rates head lower, central banks extend purchases and uncertainty surrounding geopolitics and cryptocurrencies fans demand. Strategists from Societe Generale are also looking at the yellow metal, particularly in the form of gold miners. In a note to investors, the strategists explain that gold equities tend to outperform physical gold through every cycle and have further to run. In addition, UBS raised its gold forecast to $1,450 on both trade and geopolitical risks. Full Story
By: Chris Waltzek Ph.D., GoldSeek Radio - 8 July, 2019
- Founder of The Ron Paul Institute for Peace And Prosperity returns to the show with his case for restoring a gold-backed US dollar. - In the Ron Paul Liberty Report last month, Dr. Paul noted, "The Fed Can't Save Us, But Gold Can," in response to the new rate cut cycle. - He outlines how this event could mark the beginning of a 1970’s style stagflationary episode, where galloping inflation required only 5 years. Full Story
Europe took competition to a new level last week in the global currency-devaluation olympiad. Nominating the politically-minded IMF chief Christine Lagarde rather than a blue-blooded financier to run the ECB is akin to making Trump chairman of the Federal Reserve. No longer can we pretend that the staid protocols of old-school banking still obtain in the financial realm. Instead, there is a strong whiff of desperation as Europe readies a last-ditch attempt to stimulate itself out of a liquidity trap with the ECB’s deposit rate already at minus 0.4%. Full Story
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