Author Archive: Zeal Research

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Gold Price Correlation With Federal Funds Rates Since 1971

| September 5, 2015 | Category: Price
Gold Price Correlation With Federal Funds Rates Since 1971

If the Federal Reserve’s rate-hike cycles were indeed gold’s arch-nemesis, this zero-yielding sterile asset should have been hammered in the great majority of them. Instead gold actually rallied through 6 of the 11 modern Fed-rate-hike cycles! And at average gains seen within these exact rate-hike-cycle spans of a staggering +61.0%, gold did amazingly well. Gold often didn’t just weather rate hikes, but thrived in them!

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Are Rising Rates A Threat To The Price Of Gold?

| August 22, 2014 | Category: Economy
Are Rising Rates A Threat To The Price Of Gold?

Contrary to popular belief, rising rates are no threat to gold. This metal soared in the 1970s during the last secular rising-rate environment as stocks and bonds got hit. Gold powered higher again in the 2000s with both short and long rates far higher than today’s levels. And gold surged during the only major modern rate-hike cycle seen a decade ago, when the Fed more than quintupled short rates.

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Gold Is Entering Its Seasonally Strongest Period Of The Year

Gold Is Entering Its Seasonally Strongest Period Of The Year

So when the fundamentally-driven tailwinds of the strong autumn seasonals combine with heavy buying of the GLD gold ETF by American stock traders and gold futures by American futures speculators, we are likely looking at one exceptional autumn gold rally! It won’t be smooth, it won’t climb in a nice straight line, and there will be sharp setbacks. But on balance gold is perfectly poised for a major new upleg.

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Huge Buying Ongoing In Precious Metals Futures Market

Huge Buying Ongoing In Precious Metals Futures Market

The new precious metals futures long buying didn’t start until Yellen, and it was massive too with speculators growing their long-side bets on silver by 1/6th in just two weeks. This continued the strong uptrend in silver-futures spec long buying we’ve seen since last September. Speculators haven’t been this bullish, had higher total longs, since back in February 2011 way before last year’s anomaly. And that proved a wise bet.

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New Gold: A Safe Gold Play With Attractive Pipeline

New Gold: A Safe Gold Play With Attractive Pipeline

New Gold’s stock is one that’s long responded well to its underlying metal. And it’s even responded well amidst gold’s recent rough patch. It has of course fallen on balance along with the rest of the sector. But when gold has shown signs of life, NGD has consistently exhibited good positive leverage.

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It’s A Precarious Time For Gold

| March 29, 2014 | Category: Price
It’s A Precarious Time For Gold

The Cycle count still supports the possibility of a bullish Day 34 – 2nd DCL here. But in all honesty, it’s not a position one should be taking seriously here because it requires taking a considerable amount of risk. And even a DCL right here is no guarantee of strong performance. A 3rd Daily Cycle would need to rally almost $100 just to break new highs and the risk of it falling well short and topping early is very real.

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Gold Drives Silver Is Key To Where Silver Is Going

| January 17, 2014 | Category: Price
Gold Drives Silver Is Key To Where Silver Is Going

It seems prudent to continue to expect gold to dominate silver sentiment and therefore silver prices in the years to come. The historical market performance and data is crystal-clear, gold drives silver. Silver investors need to keep this in mind. Silver is a fascinating metal to study, with its own independent global supply-and-demand fundamentals. Yet technically it has always been slave to gold’s fortunes.

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A Silver Short Squeeze Could Ignite A Major Rally

| January 3, 2014 | Category: Trading
A Silver Short Squeeze Could Ignite A Major Rally

Despite silver’s miserable 2013, its ages-old allure certainly wasn’t stamped out. Great latent interest in silver remains among investors and speculators alike. Ao as silver starts rallying again initially on short covering, it will ignite widespread buying from all quarters. This will feed on itself too. The more capital that returns to silver, the faster its price will rise. And the quicker it rallies, the more investors it will attract in. The gains in silver this year ought to be enormous, well over 50% as I explained a couple weeks ago. But the silver-stock gains will dwarf those.

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Silver Stocks Are Incredible Bargains

| December 28, 2013 | Category: Stocks
Silver Stocks Are Incredible Bargains

If silver launches radically higher like we expect it to, there will no doubt be a stock-buying frenzy that should lead to great positive leverage. The producers will see their margins skyrocket, the developers will see the IRRs of their prospective operations increase, and the explorers will see the values of their undeveloped deposits soar. It won’t take long for investors to realize that the beaten-down silver stocks are incredible bargains. And the gains should be spectacular for those who get in early.

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Silver At A Major Technical Launchpad

| December 20, 2013 | Category: Investing
Silver At A Major Technical Launchpad

Silver has cratered in 2013, spawning a sentiment wasteland of extreme bearishness. Yet peak despair is the very best time to buy low. Silver prices have converged on multiple major secular support zones, an exceedingly bullish technical launchpad. The white metal is also very cheap relative to gold, which is its primary driver. All this is setting up silver and the stocks of its miners for a fantastic new upleg in 2014.

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Gold-ETF Selling Waning

| December 8, 2013 | Category: Investing
Gold-ETF Selling Waning

I suspect 2013’s trend of extreme gold-ETF selling is reversing. It is certainly dramatically slowing, with global gold-ETF outflows down 71% sequentially between this year’s second and third quarters. GLD’s alone plummeted by 3/4ths! The main reason is selling exhaustion and the number of remaining weak hands waning. But an additional important major reason is the incredibly-toppy US stock markets.

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Gold-Futures Buying Returns

| November 8, 2013 | Category: Trading
Gold-Futures Buying Returns

Today per the latest CoT this 2013 deviation is back down to 116.3k contracts. Futures speculators still have to buy back the equivalent of 11.6m ozs of gold merely to mean revert to their 2009-to-2012 average levels of total longs and shorts with no overshooting. This remainder is 1.7x larger than the big chunk of shorts the traders initially covered in July and August which catapulted gold sharply higher! It is very bullish.

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Silver Is At A Powerful Technical Launchpad

| October 26, 2013 | Category: Investing
Silver Is At A Powerful Technical Launchpad

After plummeting a brutal 39% in the first half of 2013, silver naturally remains deeply out of favor today. Investors don’t want to touch it with a ten-foot pole, convinced silver will soon roll over to plumb ugly new depths. Investors as a herd always hit peak bearishness after exceptionally-large selloffs, extrapolating the downtrend continuing indefinitely. But when major lows are witnessed is exactly the wrong time to be bearish. Silver’s bullish price action since late June yet again proves this truth.

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Fed’s Potential QE3-Tapering Impact On Precious Metals Prices

| September 14, 2013 | Category: Economy
Fed’s Potential QE3-Tapering Impact On Precious Metals Prices

The focus on this imminent FOMC meeting is so hyper-intense that its impact should be considerable no matter what the Fed decides. The QE3 taper (or lack thereof), its size, and what the FOMC implies for future tapering will almost certainly spark sharp price reactions in the bond markets, currency markets, stock markets, and precious metals. All have moved violently this year on mere QE3-taper anticipation.

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