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Putting Gold Miners Into Proper Perspective

Precious metals expert Michael Ballanger reviews a number of the key elements that have characterized 2016's advance in gold, silver and the associated mining, development and exploration stocks.

GDXJ Chart

With the summer of 2016 passing by at an alarming pace, I think it is important to take a few moments away from the enchanting beauty of Georgian Bay and review a number of the key elements that have characterized 2016's breathtaking advance in gold, silver and the associated mining, development and exploration stocks. While gold bullion is ahead 26.6% year-to-date, the gold mining stocks have demonstrated their incredible contained leverage and why, when the market operates properly, they are vastly more rewarding than the physical metals themselves. However, the 2016 advance has had many analysts questioning the integrity of this latest move as the HUI (NYSE Arca Gold BUGS Index) and the XAU (Philadelphia Gold and Silver Index) have defied gravity, the laws of physics, the Law of Diminishing Returns, and just about every other law that historically pertains to the behavior of stocks. [Read more...]

Top Metals Smashed The Euro! Will It Hit Back?

Aibek Burabayev - INO.com Contributor - Metals


I started to cover European gold at the beginning of this year when it was at the 1000 EUR level. In spring I added silver to the pack as it had an interesting setup on the chart. Today I would like to share with you an update of the charts and to show you the outcomes.

Let us start with a single currency chart and see if we can find some clues which could help us with the metal crosses charts.

Chart 1. EURUSD Monthly: RSI Calls For Higher High

EURUSD Monthly
Chart courtesy of tradingview.com

Now, after almost two months, the dust of BREXIT hysteria has settled. The euro has managed not just to survive, but to score more than 2 cents after it touched the $1.09 mark on the referendum selloff in June. Friedrich Nietzsche once said - "That which does not kill us makes us stronger." The light version of the chart above had been shown to you in May.

The euro is still sitting on the very important trendline (dark gray) and the similar price action was earlier when the price approached this trendline. I mean the same combination of lower highs amid higher lows. The RSI has the same divergence as in 2001. This time, we have a flatter downtrend (orange) and the RSI is still below its trendline unlike in the previous case.

There are three triggers which could help the euro to have a big against US dollar once they are broken: [Read more...]

2016: Current Market Themes

A year ago almost to the day we began tracking a ‘Macrocosmic’ theme that would eventually see gold bottom and rise vs. stocks and bonds in 2016, joining its bullish status vs. commodities, which had been in place since 2014.

Nominal gold bottomed in December 2015 before silver, commodities and stocks as a counter cyclical environment birthed a new precious metals bull market.  We updated the progress here, here and here in 2016.

But markets, being the product of immeasurable moving parts, are always in motion and you cannot get too hung up on any one theme, ideology or habit.  When the Semiconductor sector began burping up its positive signals for the economy and for stocks, we listened intently and I for one, put my capital where my mouth was and noted as much each week in NFTRH.

Back in April, with the first improvement in the Semiconductor Equipment sector’s bookings, we went on bull alert.  By June 22, we had established a trend in the rising bookings and noted the Details Behind Semiconductor Leadership and the bullish implications that this Canary’s Canary in the coal mine carried. [Read more...]

GLD vs. SLV: Investors Favor Less Successful Gold

Aibek Burabayev - INO.com Contributor - Metals


Today I would like to share with you an analysis of precious metals ETFs. The goal of the study is to identify the correlation of price moves in both gold and silver with the demand for their ETF shares, represented by an appropriate precious metals holdings change. Below the chart you will read some interesting findings.

Chart 1. Gold, Silver and ETFs (Q/Q percent change): Silver Rises Without ETF Support

Gold, Silver and ETFs (Q/Q percent change): Silver Rises Without ETF Support
Chart by Aibek Burabayev, data source: spdrgoldshares.com; ishares.com

In the first quarter of the last year, we can see that investors were betting on a bottoming gold price with a 4% rise in SPDR Gold Trust (PACF:GLD) holdings despite the 1% fall in price. It’s interesting that at the same period, investors, on the contrary, cut their silver ETF holdings despite the rising silver price; it looks like they used the ‘sell silver on spike’ approach to gain on metals correlation. It’s amazing! But they were right shorting silver as it fell in three consecutive periods exceeding gold’s losing streak. [Read more...]

It's Official, They Exit! Risk Aversion Chronicles: Gold Leads The Safety Demand!

Aibek Burabayev - INO.com Contributor - Metals


Today is a historic day in World financial history, which will be recorded in our memory forever! And it was a long and sleepless night all over the world as financial markets were frozen in agonizing suspense.

We should admit that Britons are firm and consecutive in pursuing their goal of independence. Almost a quarter century ago, they decided to withdraw their currency from the European Exchange Rate Mechanism (ERM) and they didn’t turn off their road yesterday on the final referendum.

Bookies and analysts got it all wrong as they forecasted the win of the "STAY” option, but more and more we have witnessed that all efforts to calculate human emotions and perceptions fail. The economic consequences for Brexit are harmful to the UK in a short term, but they still voted to leave. People are irrational in their behavior and the realization of this fact would bring the dramatic changes in the economic science in the future. [Read more...]

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