Author Archive: Gold Silver Worlds
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In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,138.82 down $7.58 per ounce (0.66%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, gained 2.65%. The U.S. Trade-Weighted Dollar Index slipped 0.40 percent for the week. The senior miners got a reprieve with the late week surge in gold prices and outpaced the junior miners while the S&P/TSX Venture Index lost 2.94 percent.
Gold and gold miners benefit from falling bond yields today. Gold is a non-yielding asset. As a result, its appeal increases when bond yields fall. That’s especially true if the dollar is dropping as well (more on that shortly). Gold may also be benefiting from increased tensions in the Mideast. The daily bars on the first chart show the Gold SPDR (GLD) jumping the equivalent of $23 dollars today (+2.2%). Gold is recovering from a five-year low, and has a long way to go to reverse its major downtrend. The same is true of gold miners.
Even mainstream media has noticed it: silver coins are going through a true squeeze, with demand up significantly and premiums reaching an all-time high. Reuters reported today that “the global silver-coin market is in the grips of an unprecedented supply squeeze, forcing some mints to ration sales and step up overtime while sending U.S. buyers racing abroad to fulfill a sudden surge in demand.”
It seems that the precious metals complex is stabilizing. Given the growing disbelief in the interest rate hike, even precious metals bears are leaving the arena. Recent price action is becoming more and more constructive with Gold, Silver and Junior Gold Miners all pushing against their downtrend lines.
A common place to offer an individual’s precious metals is a marketplace, as there are many to be found on eBay, the largest marketplace worldwide. However, with the advance of the internet, products and services can be offered across many stores in search for the most competitive bid. Another way to offer your metal or jewelry is through a pawn shop.
According to Thomas Bachheimer, the European states are moving towards a cashless society. If this is the way the ECB wants to go, they could use Greece as a test case for negative interest rates, which, by the way, are nothing but theft.
It is getting very exciting in the gold market! We have shown several bullish gold indicators in the last couple of weeks. Here is the thing: the number of bullish indicators keeps on growing. At these low price levels, the number of bullish indicators keeps on growing, and that points to a trend change.
Returns have been quite awful to say the least, which from a contrarian perspective gives investors a chance to bet on a short term bounce, if not a long term rebound. Conditions in the Precious Metals sector are very much depressed from the historical basis, as evidenced by the following two charts.
In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,145.89 up $6.87 per ounce (0.60%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, lost 3.13%. The U.S. Trade-Weighted Dollar Index gained 1.35% for the week. Junior miners outperformed seniors for the week as the GDM Index lost 3.13 percent, more than the S&P/TSX Venture Index’s loss of 1.53%.
Bloomberg reports today an extremely interesting insight from the options market. Based on data compiled for SPDR Gold Shares (GLD) by Bloomberg, the put-to-call ratio, or the number of bearish options trading compared with bullish ones, is at the lowest since 2012. “The open interest on puts fell to the lowest since mid-July on Sept. 21, signaling bears may be losing their stranglehold on the market.” These data show that gold bears are finally showing signs of fatigue, if options trading is any indication.
Gold rallied strongly yesterday on a safe haven bid amid stock market turmoil. As the stock market was sinking lower, moving closer to its August lows, gold and silver in USD moved more than 2% higher. More interestingly, gold miners rallied more than 5% on the day. The million dollar question is where we go from here. Let’s look at two charts to get an idea of gold’s and the miners’ outlook.
One of the people who has proven to be extremely successful in the gold mining area is Keith Neumeyer. He has made First Quantum Minerals and First Majestic Silver successful, and he started those companies at the depths of the previous bear market. His first two gold miners reached billion-dollar market caps. He now is going for a third succes with First Mining Finance (FF). It’s a mineral bank for hard asset investors, where Keith and his team will accumulate high-quality resources at dirt cheap prices due to the 4-year commodity bear market.
Gold executed the bullish declining wedge with last week’s breakout. Confirmation is arriving in the form of a new PMO BUY signal and a STTM BUY signal that triggered when the 5-EMA crossed above the 20-EMA. We await a positive 20/50-EMA crossover to retire the ITTM SELL signal.
First Majestic could go lower from here but it has reached a fairly strong support level. The $3 level acted as both support and resistance during 2006 through 2010 and now price is testing that level again. The sliding parallel, see the dashed line on the chart below, provided support in November and December 2014 and price is testing that support level again.