HUI, Gold & Silver; Fun With Monthly Charts

Outside of the sound practice that is physical gold ownership in a time of monetary gamesmanship, the precious metals sector is all about speculation, at least according to 9 out of 10 chart jockeys and momentum junkies micro managing every short-term twist and turn.

Indeed, NFTRH manages gold, silver and the gold stocks on down to the short-term views as well, but that is only because the long-term views have stated that this is a time to be paying attention.  Do we pay attention because we have waited so long to promote our orthodoxy and finally be right as gold bugs?  No.  We pay attention when a chart tells us to pay attention.

While we manage the shorter-term views (both macro fundamental and technical) rigorously in the weekly report and interim updates, here I’d like to dial out to the big monthly picture with 3 large (click to expand as needed) charts of HUI, Gold and Silver to see their stories, which are the reasons we are managing shorter-term views.

HUI Gold Bugs Index

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First HUI monthly reviews the warnings to the analysis from 2012 and 2013.  They were very clear and should have kept people out of much of harm’s way with respect to gold stock speculation. Continue reading "HUI, Gold & Silver; Fun With Monthly Charts"

The Peerless Way to Precious Metal Profits

The Gold Report: In a July research report, you wrote that the ongoing decline from the all-time high in the gold price may represent a correction of the last large up leg, which some say began in 2009 or mid-2008. Or it may represent a correction of the entire 1999 - 2011 advance in the gold price. Which is it? And has that correction run its course?

Tom Szabo: We are in a correction of the 20082011 rally and it is ongoing. Big picture, the gold price needs to drop below $1,155/ounce ($1,155/oz) and then subsequently below $1,067/oz before this would represent a correction of the entire gold cycle that goes back to 1999. We haven't seen such a decline at this point so we can't conclude that it's a larger correction.

TGR: We've seen modest upward momentum in the gold price since the lows of April. Is there enough momentum to invest in gold equities? Continue reading "The Peerless Way to Precious Metal Profits"

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Precious Metals Must Make a Stronger Statement Still

Yesterday was an impulsive looking move and something of a statement in itself.  But now technically, the metals and miners need to gather themselves (after a potential pullback on profit taking) and make a real statement.

Yesterday was the booster stage (gap up), and another leg up from here would give the precious metals complex the velocity to do some real damage with respect to upside targets.  That is because important resistance zones are now at hand.  While a pullback would be normal, gold bugs obviously do not want to see a terminal velocity situation where yesterday’s momentum erodes beyond normal profit taking. Continue reading "Precious Metals Must Make a Stronger Statement Still"

'Mexico Mike' Kachanovsky Believes the Best Cure for Low Prices Is Low Prices

The Gold Report: Mike, the prevailing wisdom in the market favors producers over explorers in the precious metals equities. The thinking seems to be why buy the pasture when entire farms are selling at nearly the same price? What do you think of that strategy?

Mike Kachanovsky: That is a good summary of current affairs. Market values for the entire sector have been trimmed dramatically; even many of the highest rated stocks are down 50% to 60%. From a value perspective, it makes sense to buy higher up the food chain when you have the opportunity, to buy more established companies that offer legitimate earnings and established infrastructure.

TGR: Kenneth Hoffman of Bloomberg Research notes that production from the world's biggest gold mines has dropped 17% since early 2011. He predicts that gold mines, especially high-cost mines in Africa, will start to close as gold hovers around $1,200/ounce ($1,200/oz). Is there a bullish medium-term case to be made for gold given the shrinking supply?

MK: We have been through similar severe price corrections before. At the beginning of this century, gold's market value was below what it cost to produce it. Mines closed and companies went out of business. That scenario evolved into the bull market we have today and the achievement of all-time high metals prices.

TGR: But this is not a bull market. Continue reading "'Mexico Mike' Kachanovsky Believes the Best Cure for Low Prices Is Low Prices"

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Stunning Chart Shows Gold and Silver Defy Bulls' Optimism

By Elliott Wave International

Gold and silver have been all over the financial news.

On Thursday, June 20, silver fell below $20 (-60% from 2011 high), and gold fell below $1300 (-30% from 2011 high).

We first published the chart below after metals plunged in mid-April. It shows EWI's forecasts not only leading up to those big moves ... but during the past three years of opportunity.

Continue reading "Stunning Chart Shows Gold and Silver Defy Bulls' Optimism"