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It Feels Like Inflation

By: Gary Tanashian of Biiwii.com

Last night’s post on the US stock market ended as follows:

“As far as the Fed and its puny rate hikes are concerned, that is irrelevant.  This market is flipping them the bird.  Markets can rise a long way before a rate hike regime finally kills them.  It feels like inflation folks.”

This prompted a question from an NFTRH subscriber about what markets would benefit, and in what differing ways would they benefit if an inflationary phase comes to dominate?  That is a far reaching question and a difficult one as well, because inflation’s effects have a way of being unpredictable (how many would have answered ‘US stock market’ in the spring of 2011 to the question “where will the post-crisis inflation to date manifest on this cycle”?).

Last weekend, in an NFTRH 396 excerpt we talked about Applied Materials stellar quarterly report and what it might mean for the economy, the Fed, the gold sector and most of all the idea of an inflationary backdrop becoming more readily apparent (2003-2007 Greenspan style). [Read more...]

Pro-Inflation? Anti-USD?

By: Gary Tanashian of Biiwii.com

This is the opening segment from the May 15 edition of Notes From the Rabbit Hole, NFTRH 395.  I am releasing it for public viewing because it seems, the title’s question has come roaring to the forefront this week.  So the information (including the charts) is slightly dated, but becoming intensely relevant as of now.

We anticipated an ‘inflation trade’ or Anti-USD asset market bounce and this has been going on since mid-February. That was when silver wrestled leadership from the first mover, gold (which bottomed in December and turned up in January), and a whole host of other global asset markets began to rise persistently.

gold.spx.crb.silver.eem

So why again did the US stock market react negatively to good economic data on Friday? [Read more...]

Gold And Silver Companies With The Potential To Move The Needle

The two times mining companies add the most value are upon first discovery and when they are nearing development and production. Joe Reagor of ROTH Capital Partners focuses on the latter group, and in this interview with The Gold Report, he discusses a handful of gold and silver companies poised to move up the value curve even if gold and silver don't go up.

Gold Six-Month Chart

The Gold Report: What's your macro outlook for gold?

Joe Reagor: International debt concerns are going to drive gold this year into next year, in our view. A number of countries with mounting debt loads can't continue to pay the interest portion of their debt, let alone ever pay it back. Total world debt continues to increase year after year. If the solution is for everybody to print the money that they need to pay everybody else back with, that's going to be a massive inflationary event, which would bode well for gold.

TGR: Silver has been up dramatically vis-a-vis gold. Do you expect that trend to continue? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/6rEX-yx8Wkc/16957

All Hail the Mighty Silver Bugs...

Precious metals expert Michael Ballanger examines silver's recent moves upward.

LL

In my business, there is a great deal of travel, be it to properties in the Peruvian Andes or the Canadian Yukon or to the investment conferences in New Orleans or San Francisco or London, so I get a full psychographic cross section of every type of investor imaginable. First of all, the audiences I have encountered at the "Sound Money" conferences in Nassau or Bermuda are usually quite conservative and usually well-dressed and well-groomed. When the topic is gold and it is a controversial speaker looking for "the end of Western civilization," the audiences tend to be a tad different with hair length and dress code noticeably more avant-garde.

However, when the topic is confined to silver, while the speakers tend to be "evangelical," the audiences appear to be (operative word being "appear") simply stark-raving madmen of the first order. They usually dress in military fatigues, the males are all in ponytails, the women weigh more than the men, and the T-shirts and baseball caps on both males and females carry logos from either the WWF or the Monster Truck conventions. However, they are usually quite erudite when discussing "survival techniques"; they are usually extremely well educated and they are all able to rhyme off the silver production numbers for the past 20 years BY COUNTRY; and most importantly, they carry high distain for anyone who fails to know these facts. [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/bIkOdeGRGww/16946

Topping Euro Signals New Highs For Precious Metals

Aibek Burabayev - INO.com Contributor - Metals


This past January I wrote about European gold discussing two possible scenarios as the market was at the crossroads. The upside scenario played out. It is good to act once we know the direction as it gives us more confidence. Today I will review gold vs. euro and add silver to the pack. But the very first chart I will dedicate to the peaking euro as the price of the metals is quoted in a single currency.

Chart 1. Euro/$ Weekly: Price Is At The Top

Weekly Chart of Euro/Dollar
Chart courtesy of tradingview.com

The EURUSD is the most liquid currency pair in the world and it shows the strength of the US dollar, which is the measure of everything in the financial world. The global trend for the pair is down. The Euro hit a multi-decade bottom in 2015 and since then we have been stuck in a wide consolidation with a price range of 10 big figures within $1.0462-1.1467. I didn't take the 2015 high at $1.1714 as you can see that it was just a false break above the horizontal resistance. The price quickly fell back below resistance and closed a dip below it.

Last week shaped a reversal Doji candle, which, of course, needs further confirmation on the chart. We should see a quick drop below the middle of the channel (black dashed line) at the $1.1240 level.

The euro should break below $1.0462 to confirm the continuation of the global trend; it will certainly add to the bullishness of precious metals against this currency. If we get a weekly/monthly close above $1.1467, then we should watch closely after the reversal which will undermine the metals market in Europe. The third path is a prolonged consolidation as a result of the price reversal from the lower margin at $1.0462.

Chart 2. Gold vs. Euro Monthly: Break Up & Correction, Ready For Action!

Monthly Chart of Gold vs. Euro
Chart courtesy of tradingview.com

Gold was nimble enough to penetrate the upside of the downtrend at EUR 1065 in February. It is a good trigger for buyers. Patient traders prefer to wait for a good pullback to enter with safe stop (just below the trend) for a low-risk trade. And we can see this classic price action on the chart. It looks like the pullback has finished at the low of EUR 1065 (same price for the breakup) as the price rapidly advanced higher. Once the price passes the high at EUR 1165, we can move the stop to breakeven and enjoy the lossless bet.

The target is located on the upside of the trend at EUR 1270, if you read the earlier gold-euro post, you can see that the AB/CD concept also points to that level (EUR 1272). It's not a coincidence as both the trend model and the AB/CD concept use simple mathematical calculations.

Chart 3. Silver vs. Euro Monthly: Wait for Breakout!

Monthly Chart of Silver vs. Euro
Chart courtesy of tradingview.com

Silver didn't follow gold yet. Indeed, the price penetrated the dashed red trendline last October, but we didn't see the follow-through upside price action so far. Instead, the metal has been squeezed with a decreasing apex of the symmetrical triangle (highlighted in blue), one of the typical visual forms of consolidation.

It's good to trade on the breakout. The most expected action is upside penetration of the triangle amid rising a gold price. The target for the upside move is located at the EUR 18.75 level, calculated as a distance of the base (EUR 4.9, the widest part of the triangle) added to the break point. This is the area of the 2013 August high. In a less probable downside scenario the target is set at EUR 7.73 level.

Intelligent trades!

Aibek Burabayev
INO.com Contributor, Metals

Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

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