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Bullish Gold Technicals

Bullish Gold Technicals

Gold has been weathering some considerable selling pressure lately, which has naturally turned sentiment quite pessimistic. Bearish commentary abounds, with all kinds of predictions for further declines. But as is usually the case after any material selloff spooks traders, gold’s technicals are actually very bullish today. Gold’s next move will likely prove to be a major rally. Gold’s latest selloff started on February 29th when the Fed Chairman’s testimony before Congress convinced traders that a third round of quantitative easing is becoming less likely. Gold plummeted 5.1% on this latest in a long line of irrational QE3 scares, its biggest down day since the stock panic. Over the 6 weeks […]

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Gold QE3 Scares

| April 9, 2012 | Articles: Insights
Gold QE3 Scares

Sellers hammered gold again this week on news from the Fed. The minutes from its latest FOMC meeting convinced traders the odds for a third round of quantitative easing are waning. This was the latest in a long line of QE3 scares that have become the bane of gold’s existence. But they are merely a distraction from the Fed’s ongoing massive monetary inflation behind the scenes, which is very bullish for gold. Gold has suffered much from QE3 scares. This week’s FOMC minutes drove it 3.4% lower in 2 trading days. On the last day of February, gold plummeted 5.1% after the Fed Chairman’s testimony to Congress made QE3 look […]

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The Pesky Details of Prospectus Disclosure

The Pesky Details of Prospectus Disclosure

Over the course of gold’s bull, the companies that explore for and mine this metal have greatly prospered. The gold-stock sector has thus been one of the top-performing in all the markets over the last 10+ years, and its investors have been richly rewarded. But this last year or so has been a tough one, one that sure has tested investors’ mettle. Gold stocks had been doing great since their panic lows in 2008. Measured by the venerable GDX Gold Miners ETF, gold stocks were up nearly 300% to their late-2010 highs. This well outpaced the gains of both the general markets (+86% as measured by the S&P 500) and […]

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Gold-Stock Panic Levels

Gold-Stock Panic Levels

The beleaguered gold stocks have spiraled lower this month, heaping misery on poor fools like me naive enough to invest in them. Dwindling interest and capital has left this realm a desolate wasteland, I’ve rarely seen anything so deeply out of favor. In fact, relative to gold the gold stocks are now back down to levels only seen briefly during 2008’s epic stock panic! Are they dying, gasping their last breath? This question has enormous implications for speculators and investors. If gold stocks are doomed to never rally again, we ought to cut our losses and move on. But if this embattled sector is likely to return to favor in […]

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Gold Mining Margins (part 2)

Gold Mining Margins (part 2)

The history of gold mining has been well-documented for thousands of years. And with the demand for this most precious of metals going nearly as far back as human history, miners have ventured to just about every corner of the planet in their quest to find it. Yet unlike the miners of yore that were commanded by kings, today’s miners are commanded by profits. Like in any business, gold miners do what they do in order to make money. If they can sell their product for more than what it costs to produce, then they ought to see profits. But unlike any business, gold mining is a complex endeavor with […]

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S&P500 and the US 2012 Elections

S&P500 and the US 2012 Elections

With the 2012 elections looming, politics are increasingly dominating newsflow. And it is only going to get worse, news will be all politics all the time by summer. Speculators and investors will be watching with great interest, as these elections’ outcome will impact the markets for years. But provocatively, the fortunes of the stock markets will heavily influence voters’ psychology and therefore the results. Sentiment, or how people feel about the state of things, is incredibly powerful. We all experience it every day of our own lives. When things are going well, we tend to see everything through rose-tinted glasses. Right after you get a nice raise, a flat tire […]

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Euro’s SPX Influence

Euro’s SPX Influence

Over the past few years, the fortunes of Europe’s euro currency have appeared to significantly influence the US stock markets. This rather-curious relationship has proved vexing at times to American traders, as it doesn’t seem logical on the surface. But given the high correlation between the US stock markets and the euro, prudent traders can’t ignore its impact. And the euro’s state today is very bullish for US stocks. Ever since this odd composite currency was born in January 1999, the euro has been much maligned. More or less continually over this entire 13-year span, skeptics and naysayers have been calling for the euro’s imminent demise. They argue that a […]

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The S&P 500 has upleg room to run

The S&P 500 has upleg room to run

The US stock markets have been on fire lately, still marching higher even after the S&P 500 powered to its best January in 15 years.  Doubted from its very birth, this latest stock-market upleg continues to inexorably climb the proverbial Wall of Worry.  But while bears keep on arguing for its imminent demise, today’s upleg actually still has plenty of room to run higher.  Despite the naysayers, it isn’t too late to buy in yet. To understand where the winds of probability are likely blowing the stock markets next, we first have to gain crucial perspective on where they have been. And good charts are worth far more than a […]

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Junior Gold Producers 2

Junior Gold Producers 2

It only took eleven years, but in 2011 global gold-mine production has finally returned to pre-bull levels.  In fact, with 2011’s volume expected to come in at around 88m ounces, we’ll see a new all-time production high.  The latest exploration-and-development cycle is finally starting to bear fruit! This fruit has been hard-earned though, as the miners have had to reverse the course of a brutal production decline that bottomed out in 2008.  Incredibly global gold production had fallen nearly 13% in five years from 2003’s high, to a level not seen since the mid-1990s.  And needless to say that painted quite an alarming fundamental picture considering demand was on the […]

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Gold ETF Mass Exodus

Gold ETF Mass Exodus

Gold is enjoying an awesome January, rallying strongly out of its oversold late-December lows. But last month’s hyper-pessimistic sentiment deserves some reflection before it totally fades from memory. One of the core theses of the bears resolutely predicting sub-$1400 gold prices soon was the notion that there would be widespread liquidations in the flagship GLD gold ETF, a mass exodus of capital. If it indeed came to pass, gold would almost certainly be considerably lower than we’ve seen in recent weeks. But it didn’t, the stock traders owning GLD didn’t panic and rush for the exits as feared. Instead they boldly stood their ground, continuing the long tradition of GLD […]

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Gold-Stock Upleg Cycles

Gold-Stock Upleg Cycles

No bull market, no matter how powerful, fundamentally strong, or long-lived, rises in a nice linear fashion.  They all flow and ebb, surging forward two steps in major uplegs before retreating back one step in major corrections.  Visualize a sine wave oscillating within a rising trend.  This seemingly-capricious behavior is actually very beneficial to bulls’ health and longevity, it keeps sentiment (greed and fear) balanced. And unsurprisingly gold stocks, with their extraordinary volatility, are no exception to this ironclad bull-market rule.  Gold stocks’ amazing bull market has advanced in fits and starts.  This technical price action is driven purely by sentiment, the same dynamic that affects every popular market.  And […]

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