You can make your own guess on how long this pullback lasts.
But I think that, if traders weren't taking profits going into the weekend, gold would be up today.
We'll see what I find at the PDAC next week -- the opportunities could be extraordinary.
Friday, February 28, 2014
Gold and Miners Consolidate ... But for How Long
Here's a chart I sent to my Gold & Resource Trader subscribers today, part of a longer issue ...
(Updated chart)
You can make your own guess on how long this pullback lasts.
But I think that, if traders weren't taking profits going into the weekend, gold would be up today.
We'll see what I find at the PDAC next week -- the opportunities could be extraordinary.
You can make your own guess on how long this pullback lasts.
But I think that, if traders weren't taking profits going into the weekend, gold would be up today.
We'll see what I find at the PDAC next week -- the opportunities could be extraordinary.
Investors Return to Gold Funds
From the Wall Street Journal ...
SPDR Gold Shares, known by its ticker symbol GLD, has added 10.54 metric tons to its gold holdings this month through Wednesday, boosting its total to 803.7 tons. Net inflows for the year total $255 million.
(chart source)
One thing not covered in the article: Total selling by bullion-backed funds was something like 869.1 metric tonnes of gold last year. If bullion-backed funds buy 150 metric tonnes this year -- which I think is very possible -- then that's a shift in global supply/demand for gold of more than a thousand metric tonnes.
And that is a big deal.
SPDR Gold Shares, known by its ticker symbol GLD, has added 10.54 metric tons to its gold holdings this month through Wednesday, boosting its total to 803.7 tons. Net inflows for the year total $255 million.
One thing not covered in the article: Total selling by bullion-backed funds was something like 869.1 metric tonnes of gold last year. If bullion-backed funds buy 150 metric tonnes this year -- which I think is very possible -- then that's a shift in global supply/demand for gold of more than a thousand metric tonnes.
And that is a big deal.
Why the Ukraine and Crimea Are More Complex Than TV Wants You to Believe
Russian nationalists appear to be staging a takeover of the Crimea Penninsula, or at least the Russian bits of it. But this is much more complicated than it looks. The Crimean peninsula was conquered by Russia in the 18th century under Catherine the Great. Crimea wasn't part of the Ukraine until the 1950s, when Nikita Kruschev -- himself Ukrainian -- then head of the USSR, assigned Crimea to the Ukraine. This map shows the percentage of population that are native speakers of Ukrainian (orange) and Russian (blue) ...
Source
Source
Ethnic Russians make up the majority of Crimea’s population. Some, including retired navy officers and their families, clustered around the huge Russian naval bases there, have Russian citizenship. The peninsula’s nearly two million people includes 60% Russian speakers, as well as 12% who are Crimean Tatars, the original inhabitants of Crimea.
Ethnic Russians make up the majority of Crimea’s population. Some, including retired navy officers and their families, clustered around the huge Russian naval bases there, have Russian citizenship. The peninsula’s nearly two million people includes 60% Russian speakers, as well as 12% who are Crimean Tatars, the original inhabitants of Crimea.
Now, ethnic Russians and Tartars don't like how things are going in the Ukraine, so they're acting up -- violently. And if we're going to start parceling out bits of land according to history ...
From about 1050 Crimea came under Turkic rule, later Mongol, and later Turkic again. From 1441 until the late 1700s it was a Muslim Khanate that became an Ottoman vassal state. In the late 1700s it was annexed by the Tsarist Russian Empire. By 1900 Crimean Tatars, previously the major population, had been reduced to half of residents. After the Soviet revolution they were reduced to a quarter. Then Stalin forcibly deported many of them to Central Asia. So Crimea was over the two centuries after its incorporation into the Russian Empire largely russified and its indigenous Muslim population swamped or displaced. Hundreds of thousands of Muslim Tatars remained or have returned, but they are still a minority.
So whoever ends up owning Crimea, the odds favor them facing some kind of Islamic agitation.
So here's the question. Do you think we should really get involved in this mess? My vote: Say "hell, no" and stay the hell out.
The problem is I see the sameassholes idiots bad actors who agitated to get us into Iraq to stomp out Saddam's weapons of mass destruction now beating the drums for us to get involved in Ukraine. These fuckers dummies were so monumentally wrong on Iraq that they should never be allowed near politics or the media again.
Instead, they're running the show. Crazy world, eh?
The difference this time is that we shouldn't listen to them. We should be smart enough to know they don't have America's best interests at heart.
The problem is I see the same
Instead, they're running the show. Crazy world, eh?
The difference this time is that we shouldn't listen to them. We should be smart enough to know they don't have America's best interests at heart.
Aside from the potential waste of American lives and treasure, there are big risks from an extended conflict over Crimea. They include ...
1. Energy markets. Ukraine tensions can stoke energy-supply worries. Russia in 2006 and 2009 halted natural-gas exports to Ukraine, with the latter incident also serving to cut off supplies to Western European countries.
2. Grain markets. $17 billion of Ukraine's gross domestic product comes from agricultural exports. Ukraine is the world's third-biggest exporter of corn. Wheat is an even bigger part of Ukraine's agricultural exports, or can be when the crop isn't scorched by drought.
3. The potential damage to the Russian economy. War, what is good for? Absolutely nothing.
And if you're thinking this will boost gold, well, maybe. But it will also boost the U.S. dollar, too, as a safe-haven, so I think those balance out.
And if you want to take a deeper look into Pandora's box, remember that ethnic Russians comprise about a third of Ukraine’s 46 million people. And they didn't just move there recently. Russian control over eastern Ukraine began in 1654, when Tsar Alexei Mikhailovich intervened on behalf of an "insurrection" of Ukrainian Cossacks against the noble rulers of the Polish-Lithuanian Commonwealth.Further regions of Ukraine were added to the Russian Empire in 1792 and 1795.
And the difference isn't just language. Ukraine is split geographically between a predominantly Russian east and a predominantly Ukrainian west, separated by the Dnieper River.
So, the potential for civil war in Ukraine can't be understated. And THAT should be the thing we really worry about. Because that's the kind of thing that could drag Europe into another big war.
Thursday, February 27, 2014
The Catalyst For Gold's Next Surge Higher?
Gold and gold miners have been easing lower. And they could still have lower to go. But let me show you where we see the seeds of gold's potential next leg up. And that would be in the next downleg of the US Dollar. We'll look at the chart of PowerShares DB US Dollar Index Bullish (UUP) that I've been following for a while.
(Updated chart)
It sure looks like a bear flag may be developing in this chart. It's not a perfect bear flag, but it fits if you look at it as a continuation of a larger downtrend. Flags and pennants are short-term patterns that can last from 1 to 12 weeks. Now, every sunken ship has a chart. But if this works out, it would see UUP go down to target level 2. That, in turn, would send gold higher.
This is not investment advice. You're in charge of your own portfolio and your own investment destiny.
It sure looks like a bear flag may be developing in this chart. It's not a perfect bear flag, but it fits if you look at it as a continuation of a larger downtrend. Flags and pennants are short-term patterns that can last from 1 to 12 weeks. Now, every sunken ship has a chart. But if this works out, it would see UUP go down to target level 2. That, in turn, would send gold higher.
This is not investment advice. You're in charge of your own portfolio and your own investment destiny.
Wednesday, February 26, 2014
Cameco Roars Higher -- Chart of the Day
Here's our chart of the day -- Cameco Corp. Cameco was my recommendation in Oxford Resource Explorer's first issue.
(Updated chart)
An 8%+ move in one day isn't too shabby. Subscribers to Oxford Resource Explorer will get the scoop on why this is happening -- and what I think comes next -- in today's ORE Weekly Wire.
An 8%+ move in one day isn't too shabby. Subscribers to Oxford Resource Explorer will get the scoop on why this is happening -- and what I think comes next -- in today's ORE Weekly Wire.
Tuesday, February 25, 2014
4 Gold Stories & 4 Smokin' Hot Charts
Precious metals miners seem to be taking a pause to catch their breath; we'll see if it turns into something more. Personally, I'd like a buyable pullback, but I don't know if I've been that good.
Miners seem to have been leading the metals, so maybe this is a taste of something bigger. But see my S&P 500 chart below if you are counting on a BIG pullback. Might not be in the cards.
Here are four gold stories I find interesting ...
"Meadowbank" sounds like such a nice name, doesn't it? I remember the briefing on this project. It sounded insane then. "Mining Gold at Minus 45 Degrees Celcius"
Drought Triggers New California Gold Rush: Prospectors in Southern California are heading to the hills, saying the severe drought has exposed gold that has never been touched by human hands
China’s gold imports from Hong Kong fell in January. Mainland Chinese buyers purchased a total of 102.6 tons in January, including scrap, compared with 126.6 tons a month earlier and 51.3 tons a year earlier, data from the Hong Kong government showed. It's not a big deal; seasonal and holiday issues are at work here.
Interesting: Sales of gold coins by the U.S. Mint, the world’s largest, are heading for the worst month since September after prices jumped to a 16-week high. This is a clear sign of price affecting demand. US coin demand doesn't matter in the big picture; what matters is if price affects Chinese demand. Let's wait and see about that.
While we chew over that, here are some charts for your consideration ...
Chart #1: A New Way to Look at Consumer Confidence
Chart #2: Gold Smuggling in India
Chart #3: The S&P 500 Recovers From Its Pullback
Chart #4: US Defense Spending
Friday, February 21, 2014
Friday Afternoon Charts of Gold, Copper, Nat-Gas and More
Yesterday, I recommended Gold & Resource Trader subscribers grab three rounds of gains. They were nice gains, especially considering the short time frame. Now, we'll have to see what happens next. Will I regret selling, or will we get a buying opportunity?
(Updated chart)
(Updated chart)
Here are some charts I'm watching ...
(Updated chart)
No Really, King One Eye Is More Not a Blog Than MOMN or IKN
You may have heard that Facebook is paying $19 billion for WhatsApp, a messaging app. What, $19 billion for a messaging app? you say. Who approved that deal? Coked-up Toronto mayor Rob Ford?
But then, smooth-talking internet gurus come along to explain that WhatsApp is not a mere messaging app. It is in fact a "proprietary, cross-platform message relaying system adapted for modern use for all major internet access devices."
No, it's nothing so old-fashioned as a simple messaging app. So sure, that must be worth $19 billion, right?
This prompted Otto at IKN to explain that IKN is not a blog. "Because blogs are old fashioned. No, IKN is in fact a proprietary, cross-platform message relaying system adapted for modern use for all major internet access devices."
Not to be out done, Iwnattos, the rabid sociopath and aficionado of questionable music behind My Own Market Narrative, revealed that Market Narrative is even more not a blog than IKN. Because not only is it "a proprietary, cross-platform message relaying system adapted for modern use for all major internet access devices" but he has gifs of kittens on waterskis!
And the Internet loves cats! And Boobs!
And the internet loves sexy ninjas ...
All that, and I even have Cthulu!
Thank you.
But then, smooth-talking internet gurus come along to explain that WhatsApp is not a mere messaging app. It is in fact a "proprietary, cross-platform message relaying system adapted for modern use for all major internet access devices."
No, it's nothing so old-fashioned as a simple messaging app. So sure, that must be worth $19 billion, right?
This prompted Otto at IKN to explain that IKN is not a blog. "Because blogs are old fashioned. No, IKN is in fact a proprietary, cross-platform message relaying system adapted for modern use for all major internet access devices."
Not to be out done, Iwnattos, the rabid sociopath and aficionado of questionable music behind My Own Market Narrative, revealed that Market Narrative is even more not a blog than IKN. Because not only is it "a proprietary, cross-platform message relaying system adapted for modern use for all major internet access devices" but he has gifs of kittens on waterskis!
"This blog presently generates over $20 a month in earnings; a monthly earnings growth of 20% (easily obtainable within the kitten gif submarket) would mean this blog will generate $6 billion/month profits after just nine years. Is that earnings potential, or what?
"IKN, by contrast, is only read by smelly geologists and floor traders: truly the apex and epitome of unsexy, its readership guarantees slow and inglorious death for any corporation who associates with it (e.g. Vena Resources, Focus Ventures, Minera IRL)."
And Iwnattos closed with insults, some of which are so harsh they can't be taken back, starting with "Chavez-worshipping indigenous-people-sympathizing commie Bolivaran bastard."
Well, we could let these two cuckoo Kaiju rage against each other in futility. Or ...
I would like to point out that King One Eye is even more of not a blog than either of those two Nancy-boy pikers.
In fact, King One Eye is a SUPREME proprietary, cross-platform message relaying system adapted for QUANTUM use for all major internet access devices, including smartphones, mobile devices and Star Fleet subspace communicators, which allows instant and free access of contained information to the client and accessible via all major platforms, including Android, Apple iOS and Windows Phone.
And yes, even Blackberry if you're addicted to that hopelessly outdated platform. What else have you got? A steam-powered typewriter? Jeez.
Back to my point, who needs kittens? I have arcane charts ...
Wait! There's more. The Internet loves dogs, eh ...
And the Internet loves cats! And Boobs!
And the internet loves sexy ninjas ...
In the words of the great internet prophet, HP Lovecraft, "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn!"
So, on King One Eye, you've got charts, dogs, cats, boobs, ninjas, eldritch horrors from beyond the abyss of time, and absolute gibberish that tops that of the other "not a blog" contenders.
In sum, this is NOT a blog, and certainly much less a blog than My Own Market Narrative or IKN.
So give me my damned $19 billion already.
Thank you.
Thursday, February 20, 2014
Chart of Gold -- Test of 200-day MA
We'll be referring to this later in the week.
(Updated chart)
Stay tuned, stay vigilant, and stay cool. Opportunities are coming.
Stay tuned, stay vigilant, and stay cool. Opportunities are coming.
What If I'm Wrong on Gold?
Yesterday, precious metals pulled back sharply, and they look to continue the pullback today. Gold miners gave up about three or four days' of gains in one day, and look to give back more today. The main impetus for this seems to be disappointment over the release of the Federal Reserves' minutes from its January meeting, which were less "dovish" than some hoped.
Since gold and silver were so overbought, a pullback isn't surprising. But I think Wall Street believes this is the start of something bigger.
The reason I think that is because I'm on friendly terms with a Wall Street economist, and we've been emailing back and forth on the subject. Yesterday, he sent me this summary of his thoughts:
This would mean that Wall Street economists are completely ignoring the tremendous demand we are seeing in China. And if the Gold ETFs do a "tapering" of their own -- stop selling gold at the breakneck pace of last year -- where will the Chinese get their gold?
I think Wall Street could be in for a heck of a surprise. But we'll see. Maybe I'm the one who's wrong about gold. But I don't think so.
I think the short-term weakness in gold is due to strength in the US dollar. The dollar and euro got to the same inflection point that they always move from. And yesterday's Fed minutes added to dolllar strength by cooling dovish hopes.
On my blog, I've been following a chart of the UUP ...
(Updated chart)
In the short term, the dollar/UUP could rally to the bottom of the broken up-channel (that red dotted line on the chart). That might take a week. Timing is always difficult. Anyway, the pullback will provide the next opportunity to get long precious metals and miners.
And if I'm wrong -- well, we have stops in place to protect open gains. We can always buy again later at cheaper prices.
Good luck and good trades,
Sean
Since gold and silver were so overbought, a pullback isn't surprising. But I think Wall Street believes this is the start of something bigger.
The reason I think that is because I'm on friendly terms with a Wall Street economist, and we've been emailing back and forth on the subject. Yesterday, he sent me this summary of his thoughts:
"The recent rally in gold is more related to the labor market and the 'problems' it might pose for the Fed in tapering its purchases. So you can see from today’s minutes that the FOMC remains locked-in to the theme of an improving economy. Its gentle taper should really hurt gold but for now it is not, which is down to the weather-related pause in job creation. I expect that gold might fall once job creation in the spring returns to 200k+ per month.
"Gold will also dislike any mention of lifting the fed funds rate, although as my note points out, those arguing for a nearby lift off for the fed funds rate were easily put down at the January meeting. Rising treasury yields, which would accompany resurgent economic activity, would also harm gold."So, his view is that the rally in gold is due to weak jobs numbers -- period. That is, anticipation that the Fed will have to alter its tapering of the QE program. My economist friend believes better jobs numbers are coming, and that will sink gold.This may be the consensus view on Wall Street.
This would mean that Wall Street economists are completely ignoring the tremendous demand we are seeing in China. And if the Gold ETFs do a "tapering" of their own -- stop selling gold at the breakneck pace of last year -- where will the Chinese get their gold?
I think Wall Street could be in for a heck of a surprise. But we'll see. Maybe I'm the one who's wrong about gold. But I don't think so.
I think the short-term weakness in gold is due to strength in the US dollar. The dollar and euro got to the same inflection point that they always move from. And yesterday's Fed minutes added to dolllar strength by cooling dovish hopes.
On my blog, I've been following a chart of the UUP ...
(Updated chart)
In the short term, the dollar/UUP could rally to the bottom of the broken up-channel (that red dotted line on the chart). That might take a week. Timing is always difficult. Anyway, the pullback will provide the next opportunity to get long precious metals and miners.
And if I'm wrong -- well, we have stops in place to protect open gains. We can always buy again later at cheaper prices.
Good luck and good trades,
Sean
Wednesday, February 19, 2014
The Hidden Kingdom of Oil
My newest column for Free Market Cafe starts off with ...
Read the rest, and see another very interesting chart, here: http://freemarketcafe.com/2014/02/the-hidden-oil-kingdom/
What if you had a chance to get in on an oil boom that should last for another 26 years… would you take it? How about if I told you this oil boom was in a hidden oil kingdom that is already the world’s ninth-largest oil-producing nation?The story includes this chart ...
And it’s a place where you don’t have to put up with the geopolitical risk all-too-common to places in the Middle East. In fact, this oil boom, in this hidden oil kingdom, is taking place right under our noses.
Read the rest, and see another very interesting chart, here: http://freemarketcafe.com/2014/02/the-hidden-oil-kingdom/
6 Gold Stories for Wednesday, & 1 Chart
1. Global Gold Coin And Bar Demand Surged 28% To Record 1,654 Tonnes In 2013
The World Gold Council's "Demand Trends Full Year 2013" shows that China became the world’s largest store of wealth buyer of gold in 2013. They are not consumers as only a tiny fraction of gold is ever consumed. Chinese people bought a record 1,066 metric tons of gold last year, as sudden price falls led to a 32% jump in bars, coins and jewelry buying.
China’s increased purchases helped limit the decline in gold prices as western speculators and investors sold 869.1 tons through exchange-traded products backed by bullion.
2. 'Dama' women behind much of China's current gold demand
Massive gold purchases by Chinese `dama' investors - bargain-hunting, middle-aged women - may have propelled China past India as the largest gold consuming country in the world this year.
According to the Xinhua News Agency, the surge in gold demand seen in China was helped by frenzied purchases by these `damas', who were eager to chase cheap deals.
this group consisting mainly of married women between 40 and 60 years of age, grabbed the attention of the world for the first time in 2013. The Wall Street Journal specially created the term `dama' to showcase the urgency of the Chinese ladies in the gold market.
In the wake of the gold price slump in the international gold market, Chinese investors, mostly mothers, spent around 100 billion yuan to buy 300 tonnes of gold within 10 days.
3. The World Gold Council Clueless on Chinese Gold Demand?
The World Gold Council released the Gold Demand Trends for Q4 2013. According to this report total 2013 Chinese consumer demand was 1,065.8 tons. In my opinion this number is highly disputable.
The consequence/purpose of the structure of the Chinese gold market is that SGE withdrawals equal wholesale demand. In 2013 SGE withdrawals accounted for 2197 tons.
How come there is such a big difference between Chinese demand reported by the WGC, 1066 tons, and wholesale demand, 2197 tons? Why is the WGC missing 1132 tons? One reason is because the Chinese are hiding it. Since 2008 the Chinese have great interest to hoard in the dark in order to diversify their US dollar reserves, strengthen their economy and protect it from external shocks. The China Gold Association (CGA) changed the way they measure demand and all other Chinese gold institutions ceased publishing reports on demand since 2011. The only valuable information they continue to publish are SGE withdrawals.
4. The big gold ETF turnaround and its prospective impact
Chinese and Indian demand alongside high demand levels from a number of other countries, mostly in the East, Middle East and FSU, was perhaps more than countered, as far as the Western gold markets were concerned, by the enormous turnaround in the gold ETFs in 2013. The WGC figures put gold ETF outflows of 880.8 tonnes as against ETF intakes of 279.1 tonnes in 2012. Thus this comes out as a massive turnaround of 1,159.9 tonnes in effective market supply, which was almost certainly, although unspecified as such, the key driver forcing down gold prices in the West in 2013.
Now there are indications this year, although it is early days yet, that the outflows from the ETFs may have ended and may even be being replaced by small inflows.
5. Gold ETP Holdings In Biggest Jump Since December 2012
total gold holdings in exchange traded products rose by 3.2 tons, the biggest weekly increase since December 2012. Holdings in silver, which rallied more than 7 percent last week, jumped by 104.2 tons.
With two weeks gone, February could be on track to show the first monthly increase in ETP holdings since December 2012 as many investors who left the market last year may be tempted to get involved once again.
6. India's Smuggled gold doubles to 200 tonnes in 2013
According to estimates by the global precious metals consultancy GFMS, 150 to 200 tonnes were smuggled in 2013 from Dubai, Singapore and land routes of Bangladesh, Pakistan and Nepal. The agency estimated 112 tonnes had been smuggled in 2012.
7. US Dollar Tries to Bounce
Here is the chart of the PowerShares DB US Dollar Index Bullish Fund that I've been following ...
(Updated chart)
It looks like the US dollar wants to rally from support, but it's a pathetic bounce so far.
UPDATE: The Fed minutes released today (from January's meeting) seem to have put a bid in the U.S. dollar. This is weighing on gold. We'll see how far and long the dollar rally/gold correction goes.
Good luck, and good trades,
Sean
The World Gold Council's "Demand Trends Full Year 2013" shows that China became the world’s largest store of wealth buyer of gold in 2013. They are not consumers as only a tiny fraction of gold is ever consumed. Chinese people bought a record 1,066 metric tons of gold last year, as sudden price falls led to a 32% jump in bars, coins and jewelry buying.
China’s increased purchases helped limit the decline in gold prices as western speculators and investors sold 869.1 tons through exchange-traded products backed by bullion.
2. 'Dama' women behind much of China's current gold demand
Massive gold purchases by Chinese `dama' investors - bargain-hunting, middle-aged women - may have propelled China past India as the largest gold consuming country in the world this year.
According to the Xinhua News Agency, the surge in gold demand seen in China was helped by frenzied purchases by these `damas', who were eager to chase cheap deals.
this group consisting mainly of married women between 40 and 60 years of age, grabbed the attention of the world for the first time in 2013. The Wall Street Journal specially created the term `dama' to showcase the urgency of the Chinese ladies in the gold market.
In the wake of the gold price slump in the international gold market, Chinese investors, mostly mothers, spent around 100 billion yuan to buy 300 tonnes of gold within 10 days.
3. The World Gold Council Clueless on Chinese Gold Demand?
The World Gold Council released the Gold Demand Trends for Q4 2013. According to this report total 2013 Chinese consumer demand was 1,065.8 tons. In my opinion this number is highly disputable.
The consequence/purpose of the structure of the Chinese gold market is that SGE withdrawals equal wholesale demand. In 2013 SGE withdrawals accounted for 2197 tons.
How come there is such a big difference between Chinese demand reported by the WGC, 1066 tons, and wholesale demand, 2197 tons? Why is the WGC missing 1132 tons? One reason is because the Chinese are hiding it. Since 2008 the Chinese have great interest to hoard in the dark in order to diversify their US dollar reserves, strengthen their economy and protect it from external shocks. The China Gold Association (CGA) changed the way they measure demand and all other Chinese gold institutions ceased publishing reports on demand since 2011. The only valuable information they continue to publish are SGE withdrawals.
4. The big gold ETF turnaround and its prospective impact
Chinese and Indian demand alongside high demand levels from a number of other countries, mostly in the East, Middle East and FSU, was perhaps more than countered, as far as the Western gold markets were concerned, by the enormous turnaround in the gold ETFs in 2013. The WGC figures put gold ETF outflows of 880.8 tonnes as against ETF intakes of 279.1 tonnes in 2012. Thus this comes out as a massive turnaround of 1,159.9 tonnes in effective market supply, which was almost certainly, although unspecified as such, the key driver forcing down gold prices in the West in 2013.
Now there are indications this year, although it is early days yet, that the outflows from the ETFs may have ended and may even be being replaced by small inflows.
5. Gold ETP Holdings In Biggest Jump Since December 2012
total gold holdings in exchange traded products rose by 3.2 tons, the biggest weekly increase since December 2012. Holdings in silver, which rallied more than 7 percent last week, jumped by 104.2 tons.
With two weeks gone, February could be on track to show the first monthly increase in ETP holdings since December 2012 as many investors who left the market last year may be tempted to get involved once again.
6. India's Smuggled gold doubles to 200 tonnes in 2013
According to estimates by the global precious metals consultancy GFMS, 150 to 200 tonnes were smuggled in 2013 from Dubai, Singapore and land routes of Bangladesh, Pakistan and Nepal. The agency estimated 112 tonnes had been smuggled in 2012.
7. US Dollar Tries to Bounce
Here is the chart of the PowerShares DB US Dollar Index Bullish Fund that I've been following ...
It looks like the US dollar wants to rally from support, but it's a pathetic bounce so far.
UPDATE: The Fed minutes released today (from January's meeting) seem to have put a bid in the U.S. dollar. This is weighing on gold. We'll see how far and long the dollar rally/gold correction goes.
Good luck, and good trades,
Sean
Tuesday, February 18, 2014
CanGold Interview -- Developing a Gold/Silver Project in Mexico
Here's an interview I did last week with Erick Bertsch of CanGold (CLD on the TSX-V) ...
As I state in the video, CanGold is a very small company (market cap of just C$3.9 million). It has a lot of potential (in my opinion), but if you're interested, do your own due diligence. This is not an official Oxford Club recommendation.
As I state in the video, CanGold is a very small company (market cap of just C$3.9 million). It has a lot of potential (in my opinion), but if you're interested, do your own due diligence. This is not an official Oxford Club recommendation.
Energy & Gold, It Never Gets Old
Here are two charts of interest.
The first is a chart of gold demand. You can see how gold ETFs dumped the metal hard in 2013. This was the primary cause of lower prices last year ...
Here, Reuters presents the facts on this in the most bearish way possible. My take -- ETF selling of gold is winding down, and Chinese demand seems insatiable. I'd say gold is going higher.
By the way, over America's long weekend, gold closed over my target of $1,327. I'm not sure if that should be counted as a technical signal or not. My gut says yes -- after all, it shows what can happen when New York isn't there to put its thumb on the scales. On the other hand, the New York banks can't be ignored. I'm of two minds on this.
Anyway, here's the next chart -- a projection from the Energy Information Administration of US crude oil and liquids fuel production.
Based on actual US oil production data through January, the Energy Information Administration forecasts that the U.S. will produce an average of 8.5 million bpd in 2014 and 9.3 million bpd in 2015. This is a slight downward adjustment in the forecast for both 2014 and 2015 (down by 0.1 million bbl/d) because of indications that severe weather this winter
has caused temporary slowdowns in completing new wells.
The first is a chart of gold demand. You can see how gold ETFs dumped the metal hard in 2013. This was the primary cause of lower prices last year ...
By the way, over America's long weekend, gold closed over my target of $1,327. I'm not sure if that should be counted as a technical signal or not. My gut says yes -- after all, it shows what can happen when New York isn't there to put its thumb on the scales. On the other hand, the New York banks can't be ignored. I'm of two minds on this.
Anyway, here's the next chart -- a projection from the Energy Information Administration of US crude oil and liquids fuel production.
Saturday, February 15, 2014
Tumbling US Dollar Boosts Gold -- But that's Just ONE Factor
Here's an updated chart of the Powershares DB US Dollar Index Bullish Fund (UUP), which I've been following all week. The breakdown in the UUP and the US dollar gives us two targets ...
(Updated chart)
The dollar is falling because downbeat economic reports -- industrial output, unemployment claims, retail sales -- cast doubt that the Federal Reserve will keep scaling back its QE stimulus at each policy meeting. So it is likely that the U.S. dollar will move lower, and UUP will fall to one of thse target supports I've noted on the chart.
The question becomes, how high will gold go by the time the U.S. dollar bottoms?
Importantly, the U.S. dollar is only one driver in gold now. A more important driver is demand from China. Another more important driver is sellling by ETFs that hold physical gold.
So let's go over those.
After a massive, record year for Chinese gold demand in 2013, Chinese demand for gold in January was again staggering. SGE data shows that withdrawals from the Shanghai Gold Exchange vaults in January 2014 accounted for 247 tons. This is an increase of 43% compared to January 2013. It’s also more than monthly global mining production and an all-time record. And this is happening even as Chinese gold production climbs to an all-time record.
Assets in the SPDR Gold Trust (GLD), the biggest bullion-backed exchange-traded product (ETP), rose by 0.9% to a two-month high of 806.35 tons earlier this week, then dropped to 801.25 metric tonnes on Thursday. Still, it was the highest level since December 20. Holdings are 1.2% higher this week and headed for a third 5-day period of advances, after losing 41% in 2013. A total of 553 tons was withdrawn from the GLD last year.
In the last month, says Julian Phillips of GoldForecaster.com, there have been no sales from the GLD and more than 500K ounces of purchases. “This is tremendously significant because sales of physical gold from these U.S. gold ETFs and from the leading U.S. banks totaled 1,300 metric tons in 2013 ... This formed a key source of supply for gold. All of it went east to Asia never to return again.”
And Mining.com reports that the last time ETF investors were this bullish was on October 4, 2012 when GLD recorded 9 tonnes of inflows. At the time gold was trading just under $1,800 an ounce. The strong inflows are in stark contrast to the one-way bet gold became among ETF investors: GLD recorded only 17 days of inflows all of last year and almost 540 tonnes left the fund.
Remember, gold doesn't have to go up. And if you believe Ted Butler, JP Morgan's manipulation of the gold market is blatantly obvious.
However, all that said, it sure looks like bullish forces are lining up for precious metals and miners right now. Here's an updated version of a chart I posted earlier this week ...
(Updated chart)
If you want to read more about the irresistible forces driving gold, read my column from Investment University this week.
And for more chart action, I recommend this post at the GoldCore.com blog.
Remember, do your own due diligence before investing or trading in anything. Good luck next week.
Best wishes,
Sean
The dollar is falling because downbeat economic reports -- industrial output, unemployment claims, retail sales -- cast doubt that the Federal Reserve will keep scaling back its QE stimulus at each policy meeting. So it is likely that the U.S. dollar will move lower, and UUP will fall to one of thse target supports I've noted on the chart.
The question becomes, how high will gold go by the time the U.S. dollar bottoms?
Importantly, the U.S. dollar is only one driver in gold now. A more important driver is demand from China. Another more important driver is sellling by ETFs that hold physical gold.
So let's go over those.
After a massive, record year for Chinese gold demand in 2013, Chinese demand for gold in January was again staggering. SGE data shows that withdrawals from the Shanghai Gold Exchange vaults in January 2014 accounted for 247 tons. This is an increase of 43% compared to January 2013. It’s also more than monthly global mining production and an all-time record. And this is happening even as Chinese gold production climbs to an all-time record.
Assets in the SPDR Gold Trust (GLD), the biggest bullion-backed exchange-traded product (ETP), rose by 0.9% to a two-month high of 806.35 tons earlier this week, then dropped to 801.25 metric tonnes on Thursday. Still, it was the highest level since December 20. Holdings are 1.2% higher this week and headed for a third 5-day period of advances, after losing 41% in 2013. A total of 553 tons was withdrawn from the GLD last year.
In the last month, says Julian Phillips of GoldForecaster.com, there have been no sales from the GLD and more than 500K ounces of purchases. “This is tremendously significant because sales of physical gold from these U.S. gold ETFs and from the leading U.S. banks totaled 1,300 metric tons in 2013 ... This formed a key source of supply for gold. All of it went east to Asia never to return again.”
And Mining.com reports that the last time ETF investors were this bullish was on October 4, 2012 when GLD recorded 9 tonnes of inflows. At the time gold was trading just under $1,800 an ounce. The strong inflows are in stark contrast to the one-way bet gold became among ETF investors: GLD recorded only 17 days of inflows all of last year and almost 540 tonnes left the fund.
Remember, gold doesn't have to go up. And if you believe Ted Butler, JP Morgan's manipulation of the gold market is blatantly obvious.
However, all that said, it sure looks like bullish forces are lining up for precious metals and miners right now. Here's an updated version of a chart I posted earlier this week ...
If you want to read more about the irresistible forces driving gold, read my column from Investment University this week.
And for more chart action, I recommend this post at the GoldCore.com blog.
Remember, do your own due diligence before investing or trading in anything. Good luck next week.
Best wishes,
Sean
Friday, February 14, 2014
Silver Breaks Out -- Here Are Your Targets
Silver is breaking out to the upside, after 11 weeks of consolidation in a rectangle bottom. The main mover for both silver and gold -- which is also up strongly today -- is Chinese trade data.
I've been saying for some time that the center of gravity for precious metals has moved from West to East. What happens in China is much more important for both gold and silver nowadays than what happens in New York.
Here, I've created a daily chart of the iShares Silver Trust (SLV) with a "volume by price" overlay to give you some targets ...
(Updated chart)
That little smudge on the far right side that I've put a yellow circle around -- that's silver's price action today. Since it is breaking out, we might expect it to keep rallying until people start to sell it (duh). And that's more likely to happen at levels where more of it was bought or sold. Volume by price -- the gray/pink bars going across the chart -- show us just that.
So the next overhead resistance comes at 21.50. That's where a lot of silver was bought, but even more was sold. aFter that comes 22.55. And after that, we'll see if silver can get over its previous two highs, just under $24.
What if silver gets above $24? Then I'd really only look to the technical level of the low silver made at 25.17 before it collapsed.
Above that, the next place where silver saw a lot of buying and selling was around $30.40.
You could choose other support and resistance for silver using, say, Fibonacci levels. I'm just using this chart to present some ideas. In any case, silver looks pretty bullish from a technical standpoint.
Reuters reports: The value of China's total exports climbed 10.6 percent in January from a year earlier, the Customs Administration said on Wednesday, more than five times market forecasts for a 2 percent rise.That was a couple days ago. But silver is starting to get good press. And apparently that jolted the sleeping giant that is Wall Street into action today.
I've been saying for some time that the center of gravity for precious metals has moved from West to East. What happens in China is much more important for both gold and silver nowadays than what happens in New York.
Here, I've created a daily chart of the iShares Silver Trust (SLV) with a "volume by price" overlay to give you some targets ...
That little smudge on the far right side that I've put a yellow circle around -- that's silver's price action today. Since it is breaking out, we might expect it to keep rallying until people start to sell it (duh). And that's more likely to happen at levels where more of it was bought or sold. Volume by price -- the gray/pink bars going across the chart -- show us just that.
So the next overhead resistance comes at 21.50. That's where a lot of silver was bought, but even more was sold. aFter that comes 22.55. And after that, we'll see if silver can get over its previous two highs, just under $24.
What if silver gets above $24? Then I'd really only look to the technical level of the low silver made at 25.17 before it collapsed.
Above that, the next place where silver saw a lot of buying and selling was around $30.40.
You could choose other support and resistance for silver using, say, Fibonacci levels. I'm just using this chart to present some ideas. In any case, silver looks pretty bullish from a technical standpoint.
The Rising Tide in Gold Stocks
I started tinkering with Google Finance Portfolios, because I'm finding the Yahoo Finance portfolios lacking/clunky in some respects. There is an official track sheet of my positions at Oxford Club HQ, but I don't have direct access to it.
Anyway, I've noticed that the rising tide in precious metals companies is pretty strong. Here is the performance year-to-date of my open positions in Gold & Resource Trader, which is a mix of gold/silver producers, oil & gas companies and industrials, but recently heavily weighted toward precious metals ...
A gain of 135% since the beginning of the year in these stocks isn't too shabby. It helps that gold miners started the year pounded into the dirt, and I added to underwater positions, which some traders will never do. I couldn't help myself. Fundamentally, these stocks were super-cheap.
My subscribers have experienced a huge swing in what their recommended positions are worth. They just had to ride the Devil's Own Rollercoaster l to get there.
And sure, a rising tide lifts all boats. So I'm not going to take too much credit for gold miners going up when gold is turning more bullish. But time and again, my picks are outperforming the broad mining industry. That's the real trick.
Note that this is only the open positions. I have closed out some losers. I've had more closed winners than losers, but I tend to cut my losers short. I'm sure if we included those positions I closed at a loss, it wouldn't be nearly as impressive. But Google Finance doesn't track that, at least that I've figured out so far.
By the way, if you know if Google Finance Portfolios credits you for dividends, drop me a note. I know the official track at work will do that, and I can always square it that way. But the more I learn about my online tools, the better.
We'll see how chipper I feel during gold's next correction. Anyone can do well when things are going up. What do you do when things go down? That's the question.
As long as gold achieves that $1,327 target I've laid out, I think a correction is a buying opportunity. If gold turns lower before then, well, that's why we are using trailing protective stops, right?
Whatever you do, be careful. This market is a cruel and unforgiving bitch. But we're also seeing there are plenty of opportunities to profit, at least so far.
Good luck and good trades,
Sean
Anyway, I've noticed that the rising tide in precious metals companies is pretty strong. Here is the performance year-to-date of my open positions in Gold & Resource Trader, which is a mix of gold/silver producers, oil & gas companies and industrials, but recently heavily weighted toward precious metals ...
My subscribers have experienced a huge swing in what their recommended positions are worth. They just had to ride the Devil's Own Rollercoaster l to get there.
And sure, a rising tide lifts all boats. So I'm not going to take too much credit for gold miners going up when gold is turning more bullish. But time and again, my picks are outperforming the broad mining industry. That's the real trick.
Note that this is only the open positions. I have closed out some losers. I've had more closed winners than losers, but I tend to cut my losers short. I'm sure if we included those positions I closed at a loss, it wouldn't be nearly as impressive. But Google Finance doesn't track that, at least that I've figured out so far.
By the way, if you know if Google Finance Portfolios credits you for dividends, drop me a note. I know the official track at work will do that, and I can always square it that way. But the more I learn about my online tools, the better.
We'll see how chipper I feel during gold's next correction. Anyone can do well when things are going up. What do you do when things go down? That's the question.
As long as gold achieves that $1,327 target I've laid out, I think a correction is a buying opportunity. If gold turns lower before then, well, that's why we are using trailing protective stops, right?
Whatever you do, be careful. This market is a cruel and unforgiving bitch. But we're also seeing there are plenty of opportunities to profit, at least so far.
Good luck and good trades,
Sean
Thursday, February 13, 2014
Gold Rockets as US Dollar Gets Crunched -- Chart
Gold tested $1,300 today. Let me show you one reason why ...
I'm putting together a Gold & Resource Trader issue for tomorrow, including this chart of the PowerShares DB US Dollar Index Bullish Fund (UUP), which tracks the US dollar ...
(Updated chart)
As you can see from the chart, the dollar crumpled like wet tissue paper on Thursday. Traders are blaming the swoon on the weak jobs and retail numbers, and that may have something to do with it. Weak jobs give the U.S. Federal Reserve another reason to keep up its quantitative easing program or find some other way to goose the economy with easy money.
And that is very good for gold. And your open gold miner positions.
I have a bunch more stuff in tomorrow's issue of Gold & Resource Trader. Subscribers should stay tuned.
I'm putting together a Gold & Resource Trader issue for tomorrow, including this chart of the PowerShares DB US Dollar Index Bullish Fund (UUP), which tracks the US dollar ...
(Updated chart)
As you can see from the chart, the dollar crumpled like wet tissue paper on Thursday. Traders are blaming the swoon on the weak jobs and retail numbers, and that may have something to do with it. Weak jobs give the U.S. Federal Reserve another reason to keep up its quantitative easing program or find some other way to goose the economy with easy money.
And that is very good for gold. And your open gold miner positions.
I have a bunch more stuff in tomorrow's issue of Gold & Resource Trader. Subscribers should stay tuned.
Wednesday, February 12, 2014
Gold Miners Are Back in a Bull Market
In a previous post, I told you how gold has to get above $1,327 to signal a new bull market. But gold miners aren't waiting. That's probably because the smart funds know leveraged miners trading at dirt-cheap prices when they see 'em.
(Updated chart)
Looking at the weekly chart, you can see that the Market Vectors Gold Miners fund (GDX) has broken its big downtrend. The ADX indicator on the bottom shows the bearish trend is over. The move is coming on nice volume, too, which I'm not showing on this chart because it's busy enough (maybe next time).
The next target for the GDX is in green -- a nice move, and it could come quickly.
Let's take a look at a chart of the SPDR Gold Trust (GLD) while we're at it ...
(Updated chart)
I've added an indicator called the $BPGDM (Gold Miners Bullish Percentage Index). We need the BPGDM to rise above 30 for a confirmed bullish signal. It's not always perfect -- we got a false signal in July of last year. But combine that with the double bottom in gold and miners, and the positive shift in momentum, and I'd say gold's odds of getting back into a bull market are better than average.
Now imagine me saying that in a Crocodile Dundee voice after I throw a knife into a wall. There ya go.
Interestingly, this is coming as the US dollar index bounces from the bottom of its channel, as I predicted it would in a post earlier this week.
(Updated chart)
Since gold is priced in dollars, a bounce in the dollar, as seen tracked by the UUP here, SHOULD weigh on gold prices. That's not happening, at least not yet.
And the pullback in gold miners this morning was remarkably brief. A lot of hot money wants in, methinks.
The proof will be in the pudding. But the two new precious metals positions I recommended to Gold & Resource Trader subscribers last week are already racking up nice open gains. In fact ALL the Gold & Resource Trader recommended open gold and silver miner positions are showing nice open gains. I think there's more to come. Stay tuned.
Looking at the weekly chart, you can see that the Market Vectors Gold Miners fund (GDX) has broken its big downtrend. The ADX indicator on the bottom shows the bearish trend is over. The move is coming on nice volume, too, which I'm not showing on this chart because it's busy enough (maybe next time).
The next target for the GDX is in green -- a nice move, and it could come quickly.
Let's take a look at a chart of the SPDR Gold Trust (GLD) while we're at it ...
I've added an indicator called the $BPGDM (Gold Miners Bullish Percentage Index). We need the BPGDM to rise above 30 for a confirmed bullish signal. It's not always perfect -- we got a false signal in July of last year. But combine that with the double bottom in gold and miners, and the positive shift in momentum, and I'd say gold's odds of getting back into a bull market are better than average.
Now imagine me saying that in a Crocodile Dundee voice after I throw a knife into a wall. There ya go.
Interestingly, this is coming as the US dollar index bounces from the bottom of its channel, as I predicted it would in a post earlier this week.
Since gold is priced in dollars, a bounce in the dollar, as seen tracked by the UUP here, SHOULD weigh on gold prices. That's not happening, at least not yet.
And the pullback in gold miners this morning was remarkably brief. A lot of hot money wants in, methinks.
The proof will be in the pudding. But the two new precious metals positions I recommended to Gold & Resource Trader subscribers last week are already racking up nice open gains. In fact ALL the Gold & Resource Trader recommended open gold and silver miner positions are showing nice open gains. I think there's more to come. Stay tuned.
Tuesday, February 11, 2014
Market Still in the Phantom Zone -- 3 charts
Superman fans among us (the older ones anyway, harumph-harumph) will remember the Phantom Zone as a place where things were exiled and remained essentially unchanged until they exited the Zone. I believe the S&P 500 is in the Phantom Zone right now.
Here are some charts of the S&P 500 that I'm watching ...
(Updated chart)
The S&P 500 has recovered nicely from its recent sell-off. But it's still not in the clear. It has to regain -- and hold -- the 50-day moving average.
Here is a longer-term chart for perspective ...
(Updated chart)
Finally, remember that market pullbacks are essentially politically driven over the past four years, and there is another potential debt-ceiling battle coming up in a couple weeks.
(Updated chart)
By the way, new Fed Chairwoman Janet Yellen speaks to Congress today, and it turns out she's not a giant pinata stuffed with money. Wall Street, stick in hand and blindfold at ready, is pretending not to be disappointed.
Good luck and good trades today.
Here are some charts of the S&P 500 that I'm watching ...
The S&P 500 has recovered nicely from its recent sell-off. But it's still not in the clear. It has to regain -- and hold -- the 50-day moving average.
Here is a longer-term chart for perspective ...
Finally, remember that market pullbacks are essentially politically driven over the past four years, and there is another potential debt-ceiling battle coming up in a couple weeks.
By the way, new Fed Chairwoman Janet Yellen speaks to Congress today, and it turns out she's not a giant pinata stuffed with money. Wall Street, stick in hand and blindfold at ready, is pretending not to be disappointed.
Good luck and good trades today.
Monday, February 10, 2014
Breakout! Charts of 2 of the Hottest Stocks in Precious Metals
Today, we're going to look at two stocks that are very familiar to Oxford Resource Explorer subscribers.
First, a weekly chart of Silver Wheaton (SLW) ...
(Updated chart)
Silver Wheaton popped above its downtrend today. That's good, because it spent a few weeks drifting sideways. We'll need follow-through, but valuation and potential growth are lining up in your favor.
Next, a daily chart of Goldcorp (GG) ...
(Updated chart)
We didn't buy the bottom, but bought it cheap enough that you have some very nice gains in a short time. Kudos if you're an Oxford Resource Explorer subscriber.
And stay tuned for your next Oxford Resource Explorer Weekly Wire, which is coming on Wednesday.
I like how the other positions I recommended to you in ORE look here, too. And for more analysis of gold, see my post from earlier today.
First, a weekly chart of Silver Wheaton (SLW) ...
Silver Wheaton popped above its downtrend today. That's good, because it spent a few weeks drifting sideways. We'll need follow-through, but valuation and potential growth are lining up in your favor.
Next, a daily chart of Goldcorp (GG) ...
We didn't buy the bottom, but bought it cheap enough that you have some very nice gains in a short time. Kudos if you're an Oxford Resource Explorer subscriber.
And stay tuned for your next Oxford Resource Explorer Weekly Wire, which is coming on Wednesday.
I like how the other positions I recommended to you in ORE look here, too. And for more analysis of gold, see my post from earlier today.
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