RSSCategory: Articles: Gold Silver Prices

Gold continues its bounce on 18 May 2012

Gold continues its bounce on 18 May 2012

Gold continues to bounce higher in today’s session as it moves further away from the bottom of the BROAD 8 MONTH TRADING RANGE shown on the chart below. The metal actually seems to be reverting to its safe haven function as it is holding its gain in spite of continued weakness in the broader US equity markets. It does seem to have hit a band of resistance, as might be expected, near the psychological round number of $1600. For gold to get a handle of “16” in front of the price, we are going to need to see more hedge funds willing to go long this market even as their […]

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Target 2 reached in Silver

Target 2 reached in Silver

The second target for the bearish “Head and Shoulders” pattern on silver was reached for greater than $25,000 per contract.  The target was using “Measured Rule”, which takes the distance from the top of the head to the neckline, and adding it onto the breakdown point. My previous post on silver and the first target of the “Descending Triangle” being reached for $11,000 per contract can be found here. Once again a trailing stop loss put in any place other than what would have invalidated the trade idea or confirmed a reversal, (such as a fear of losing profits) would have been brutal had it been stopped out prior to the target being […]

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Gold Bouncing from Support in Asian Trade

Gold Bouncing from Support in Asian Trade

After what seems like a nearly vertical fall in the gold price over the last 7 or 8 days, gold is finally getting a bit of a reprieve this evening as it enters Asian trade. The interesting thing about this most recent selloff is that reports of physical offtake have indicated good buying of the metal down here at these levels. This has been swamped by hedge fund liquidation and some fresh short selling as some in this category are moving onto the short side. As you can see on the chart, gold fell nearly right to the very bottom of this 8 month long trading range before bouncing higher. It […]

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Gold: Like Summer 2011 Never Happened

Gold: Like Summer 2011 Never Happened

Wearing its greatest debt burden since WWII, the UK government can now borrow for 10 years at less than 1.9% per annum. The US Treasury is paying 2.9% per annum on 30-year debt. Does anyone really expect a yield of less than 3% to beat inflation between here and 2042…? Yet the price of gold – the anti-debt – keeps falling, and it keeps falling despite the imminent failure of Greece’s Euro membership and the looming collapse of Europe’s banking system. Some €700m per day is being pulled from Greek banks. Global stock markets have fallen over 7% already this month, the broad commodity markets have fallen for 10 out […]

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George Soros Opts to Buy Gold But Asian Selling Continues

Spot wholesales prices to Buy Gold bounced $10 per ounce from a new 5-month low at $1527 in London trade Wednesday morning, rallying as the Euro, stock markets and commodity prices also retraced their fresh losses. Spanish and Italian bond yields both eased back but held above 6% as Spain’s prime minister Mariano Rajoy warned the Madrid parliament of “a serious risk that [the markets] don’t lend to us or that they lend to us only at astronomical prices.” President Karolos Papoulias of Greece – now losing €700m per day in bank deposits according to senior figures – today appointed a judge to act as interim prime minister ahead of re-run elections […]

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Greek bank run fears growing

Greek bank run fears growing

With the economic situation in Greece becoming more fraught by the day, The Wall Street Journal reports that Greek depositors withdrew 700 million euros from the country’s banks on Monday, with fears growing of a widespread bank run. The chart below (courtesy of The Big Picture blog) shows the huge draw down in domestic deposits over the last two years: Precious metals are still being pummelled by hedge funds’ “risk off” trades. Gold has now broken down below $1,550, while silver is trading below $28 and looking likely to test support just above $26. The euro has sunk to $1.27, while the US 10-Year Note is yielding just 1.77%. The yield on German […]

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Gold Bull Market Not Over But Gold Futures Show Disconcerting Bearishness as Greece Faces June Deadline

Bullion and Gold Futures prices dropped further again Monday morning, losing 1.3% to hit $1560 per ounce in London trade as commodities, world stock markets and the Euro currency all sank once more amid a failure in Athens to negotiate a coalition government. The Greek state may be unable to pay salaries and pensions “from the beginning of June” according to stand-in prime minister Lukas Papadimos – warning party leaders in a letter leaked to the press today – because May’s tranche of the international bail-out was cut and tax revenues are falling. Spanish police this morning evicted the last 200 “indignant” demonstrators from Madrid’s Puerta del Sol after another weekend of protests. The […]

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Nepalese currency under pressure

Gold priced in Nepalese rupees hit a new record high per troy ounce earlier this month, at 56,000 Nepalese rupees per tola. After neighbouring India recently announced a rise in its gold import taxes from 2 to 4%, the Nepalese government had no choice but to raise its own gold import taxes in response, in order to avoid smuggling activities at its borders. The small Himalayan state is often forced to make political and economic adjustments depending on policy in Delhi. So gold import taxes have climbed from 1,750 to 2,680 Nepalese rupees. Sales of gold jewellery dropped in response. However, continuing weakness in the Indian and Nepalese rupees is helping […]

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Major Bottom in Precious Metals Could Occur This Week

Major Bottom in Precious Metals Could Occur This Week

Normally catching a bottom is not difficult. Bottoms tend to occur instantly while market tops form during a process. Yet, I’ve found that bottoms of long-term significance do not occur instantly. Like tops, they can take time to develop. For example, think about late 2008 to early 2009. Commodities hit their price low in December but the bottoming process began in October and wasn’t complete until May. Emerging markets hit their low in November but the process began in October and ended in March. Returning to the present, we see that Gold and Silver look set to retest their late December lows. Our work leads us to argue that the […]

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Gold Probing the $1550 Level

Gold Probing the $1550 Level

Gold has continued to see further selling in today’s session with traders once again exiting “RISK” trades in favor of the “Growth Off” or RISK AVERSION trades. Long commodity positions, along with long equities, are getting liquidated with money flows heading towards US Treasuries in general. This can be seen in the CCI, the Continuous Commodity Index, which is moving lower while bonds move higher, taking interest rates down even further as the yield on the Ten Year is now down below the 1.80% level. Remember, there has not been a week yet during which this yield ENDED BELOW that critical level. Gold’s move down towards $1550 has in the […]

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Target reached on the gold price

Target reached on the gold price

The “Measured Rule” target of the “Symmetrical Triangle” has been reached for $7,000 per contract (See daily chart right hand side below). Measured rule takes the distance from the first reaction in the triangle and adds it onto the breakdown point for an initial profit taking target. This seems to be about the distance it takes for traders on the wrong side of the “Open Interest” to unwind their large losing positions that were built up within the pricing pattern AND for the winning short traders to continue piling it on in going for the “jugular” before the profits get taken and the losers get cleaned out. The market at times seems to return back into […]

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Gold Miners, Junior Gold Miners & the Metals and Mining ETF’s

Gold Miners, Junior Gold Miners & the Metals and Mining ETF’s

Since I posted earlier today some commentary on global “Exchange Traded Funds”, I thought it would also be a good time to share analysis on the Gold Miners ETF.  I often get asked questions on mining stocks since I frequently post on the precious metals futures.  This prior blog post of mine on the gold miners ETF is definitely worth a review here. In that post I discussed in detail the current pattern that was developing in GDX “prior” to the breakdown.  What I mentioned then was that GDX formed a “Broadening Top” formation, and in my experience a broadening top could be either a continuation or a reversal pattern.  However, the breakout was likely to be a strong signal. There is no reason from […]

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Silver Chart and Comments of 11 March 2012

Silver Chart and Comments of 11 March 2012

Silver continues to be the poor poster child for the Deflation or Risk Aversion Trade. It’s chart is abysmal at this point as it has steadily retreated since peaking near $50 in what seems a lifetime ago. About the only positive thing that can be said about it is that is had not been below the $26 level for some time now. That level still seems to be bringing in buyers. Unless something changes rather drastically over the next week, it looks like it is going to once again test the resolve of those buyers that have been busy down there. If it holds, fine; if not, it would get […]

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Gold bugs will be vindicated

In recent weeks, while the eurozone has suffered escalating levels of systemic stress in government bond markets and its banking system, the gold price has fallen under $1,600. One would have thought that – but for the occasional fat-finger trade – gold would rise in all this instability, not fall. Putting aside short-term considerations, the simple reason has to be that the investment establishment, which has bought into the bond market bubble, does not believe that gold is any longer an alternative to paper money. We can understand why they think this. Though the Keynesian vs Austrian economic debate is attracting increasing attention, financial services companies recruit economists who have been trained in the […]

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