Gold Update: Is A Bear Face Showing Up?

Gold has missed our main target by $20 as it topped at the $1557 on the 4th of September. The gold optimists still benefited nicely as this peak was $67 above the first target of $1490, that we hit more than one month ago. So, it was definitely worth it to keep bullish for one more month.

Let’s see below if there were a lot of gold optimists a month ago.

Gold Poll

Indeed, the majority with a large margin preferred the continuation of the gold’s rally. It means you could book more than $60 for every ounce staying bullish. Thank you for support as I also believed in that outcome.

In the meantime, we should bear in mind that this was just a considerable correction, which had started in December of 2015. It has been retracing the other drop between 2011 and 2015. So, it is evident that the considerable drop and the correction are almost equal in time it took to emerge – 4 years both. Shall we book the recent rally as “done”? Continue reading "Gold Update: Is A Bear Face Showing Up?"

Precious Metals Were Ripe For A Pullback

If you hear one peep out of the gold community about a precious metals “takedown”“attack” or any other such aggressive or war-like language you will then be hearing some old fashioned and promotional gold bug orthodoxy. Fortunately, a casual look around the Bug-o-Sphere does not yield too many obvious conspiracy theorists or importantly, cheerleaders.

Indeed, it seems that all too many bugs expected this correction in gold, silver and the miners. That is a good thing because when the real top comes these ladies are going to be out front and greed will be running rampant (quite possibly against a negative fundamental or valuation backdrop as in 2008).

 

Instead, everybody, it seems knew about the high-risk Commitments of Traders situation for gold and silver. The CoT is not a timer, but for weeks now it had been a condition that’s been in place for a correction. It’s not a “takedown”, it’s a condition of too much speculation that had to be addressed. Now it is. Other CoT data available here.

gold cot

silver cot

As the CoT, Hulbert’s HGNSI and the extreme overbought readings first in the gold price, but then dynamically in the silver price and the miners gathered to form a high-risk situation, the time to take some profits was over the last couple of weeks, not now. Gold oriented newsletters appear to have jerked over bullish with the latest head-fake rise in the gold price. Continue reading "Precious Metals Were Ripe For A Pullback"

Gold Hit First Target

Last Wednesday gold had hit the minimum target of $1490 that we were waiting for since January when the price was at $1288. The target was clear, but the path was not and only this May the market eliminated one of three possible options. One month later, it has finally shown its real face leaving the single initial path to go.

Last month gold advanced quite well, but it failed ahead of the first target. I spotted the consolidation on the 4-hour chart and shared it with you to reassure disappointed bullish traders as to when the price doesn’t reach the target someone could start to exit early. Consolidations are tricky by nature, and I showed you three possible types it could unfold. Let’s see below which one you liked the most.

Gold Poll

The triangular type was your first choice; the simple correction was the second with a minor gap, and the complex flat was the least liked. And again the majority of you were right as this was a triangle. Let’s see it in the updated 4-hourly chart below. Continue reading "Gold Hit First Target"

The Bond Yield Continuum And Gold

Have you heard the news? US Treasury bonds are skyrocketing as it turns out there is no inflation amid a global central bank NIRP-a-thon and race to the currency bottom. Going the other way, our 30yr Treasury yield Continuum is burrowing southward.

If you check out yesterday’s post you’ll see proof that the 2018 NFTRH view that people should tune out the bond experts instructing BOND BEAR MARKET!! was 100% on target.

But today the din is coming from the opposite pole. Everywhere you look on the financial websites it’s now about tanking yields, decelerating growth, trade war damage, and deflation. Here is the 30-year bond yield (TYX), which is front and center in this hysteria (click the charts below for the clearest view). That is one impulsive looking drop.

30 year bond yield

But just as we warned that the precious metals move was a “launch” (not a blow-off as some were calling it) in June because it was at the beginning rather than the end of an extended move, we note that TYX is impulsively dropping into a potential climax. Everybody is on the opposite side of the boat they were on in H2 2018. That would be the BOND BEAR MARKET!! side of the boat with experts Gross, Gundlach, and company. Now amidst the current Armageddon (the SPX is after all down a whole 4% from its all-time high, he said sarcastically) backdrop, it’s all BOND BULL MARKET!! all the time.

Wash…

Rinse…

Repeat… Continue reading "The Bond Yield Continuum And Gold"

Precious Metals Big Picture

While many are talking about major new bull markets in gold, silver and the miners I find it safer to set realistic goals within a still very bullish outlook. After all, we became bullish in November, had to retrench due to over-bullish sentiment and fading fundamentals in February (both situations linked here) and then have been back in the bull seat since the gold stock launch as noted on June 3rd.

The point being, I have nothing to prove to you; nothing to woo you and tempt your greed impulse about. NFTRH has simply called the sector in line with its fundamentals and technicals, and that is what we continue to do as of this day. We chart 20 quality miners (+/-) each week and note short-term targets, resistance, etc. for the miners, gold and silver routinely.

The other priority is to stay on top of the still-bullish fundamentals. Most recently silver joined the party and is probably slamming our favored theme into gear, which is for it to take over leadership from gold and potentially lead the macro to a future inflationary cycle. Easy now, that is still in the realm of potential, not yet reality. But all of this fun – and it has obviously been fun lately – takes place against a big picture that is lumbering along at its own pace.

What I like best is that due to the big picture view I can put forth a conservative 2019 plan, and it still calls for a minimum of another 70% upside for the HUI index. Within that, many of the miners we track will do much better. And within that, we have not even seen the speculative end wake up yet. Those would be the little TSX-V type penny stock bottle rockets (lottery tickets) that pull 400% rallies out of nowhere when they finally get played.

Okay, let’s reel it into the lumbering big pictures on HUI, gold, and silver. As noted, there will be bumps and pullbacks along the way. Monthly charts are not preferred for managing those situations so we’ll stick with the dailies and weeklies in NFTRH reports. But with the ferocity of the current rally (and the fundamentals behind it) it appears a good bet that a second leg to the impulsive ‘A’ leg in 2016 is underway after the beautiful consolidation that killed everyone’s spirits (as it should) since 2016. Continue reading "Precious Metals Big Picture"