The Golden Truth: Follow-up To Yesterday

Thursday, August 23, 2012

Follow-up To Yesterday

“Whether it be gold shares on their own, compared to gold, versus bonds or versus the stock market, gold shares are rising from the dead.” - Aden Sisters, sourced from Peter Brimelow's Marketwatch column (link below).

Gold is up about another $30 from when I published yesterday's post. I never assume that we'll get a move like that in 24 hours, but I know that we have days ahead of us in which gold will move $100 or more. Gold is up nearly $150 in just over the last 62 hours.

Yesterday I posted a 3-yr weekly chart. I thought it might be interesting to look at an even "bigger" picture of gold. Here's a 10-yr, monthly chart of the Comex gold:

There's really not a lot that can be said beyond what is being conveyed by the chart itself. Leonardo Da Vinci could not have created a more perfect diagram of a bull market. We've had three nasty bull market price corrections during this 11-yr bull. I've highlighted them with the red circles. Each one is characterized by a quick fall from a cyclical price peak, followed by a period of consolidation, followed by another extended move to a new high. I excpect this time around to be no different.

Again, notice the positioning of the MACD signal. Given that this is being measured on a monthly time frame basis, it will take a long, extended move higher to produce an over-bought MACD reading. In other words, every other wildly bullish indication is being confirmed by this indicator.

I was mentioned this morning in Peter Brimelow's Marketwatch column - Brimelow is probably the most experienced and knowledgeable of the mainstream gold market reporters/writers: "'The Golden Truth website, reportedly written by a gold-market professional, says on Wednesday after a detailed chart discussion: “From both a fundamental and technical standpoint, the indicators for gold to make a run to new highs have not been this bullish in the 11-year bull market.'" Here's his report from today: LINK Brimelow has a lot of connections in the market not available to most writers and it's worth checking Marketwatch for his reports.

I'll end with one thought for you ponder: The gold (and silver) bull market has had an impressive 11-yr run, given the incredible amount of resources that the western Central Banks and media spin-machines has thrown at gold in an attempt to suppress the price and discredit gold's importance to any financial system - just imagine how powerful and violent the move will be once the Fed/ECB/BOE lose all ability to control the price...

7 comments:

Hal (GT)Thursday, 23 August, 2012
Thanks for posting this Dave, that is indeed an impressive chart.

I'm looking forward to the breakout myself and expect it to be something to behold.

The more debt the governments pile on, the higher that gold spot is going to go. There's no way to escape it.
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AnonymousThursday, 23 August, 2012
The Middle Class Is Broke: Pew Study Reveals Real Problem With Economy

A recent Pew study confirms that America's middle class has recently experienced a "lost decade."

Since 2000, the Pew says, "the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future." Pew cites statistics showing that middle class earnings and net worth have plummeted since the mid-2000s and that about 85% of the middle class say it is harder to maintain their standard of living than it was 10 years ago.

http://finance.yahoo.com/blogs/daily-ticker/middle-class-broke-pew-study-reveals-real-problem-155018682.html

1 in 5 Americans cannot afford to buy food: Poll

A total of 177,662 adults from across the United States responded to the poll conducted by Gallup organization via phone from January through June 2012.

According to the findings, which were made public on August 21, almost one in five Americans in 15 states say they had trouble buying food at least once during the past 12 months.

“Nationwide, 18.2 percent of Americans so far in 2012 say there have been times when they could not afford the food they needed, on par with the 18.6 percent who had trouble affording food in 2011,” the Gallup poll results also stated.

http://www.presstv.com/detail/2012/08/22/257546/1-in-5-americans-face-food-hardships-poll/

Either the money flows or the people flow....into the streets.

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AnonymousThursday, 23 August, 2012
Agreed. Only the 2009 plunge compares to the recent bearishness in the past 12 or so years with respect to STO, RS, MACD, etc.. A super great time to get in for the move up.
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AnonymousFriday, 24 August, 2012
In addition to the support of that chart from the demand side - the lengthy correction/consolidation/price controls is having a bigger impact on the supply side. Not only has the "price control" in the precious metals had an effect on the metals miners but the fall in global economy will have a tremendous impact.

Wondering if there is an appreciation for the supply side crunch...here a silver focused article

http://www.silverseek.com/article/silver-sector-shrinking-5826

And the worlds biggest resource company BHP Billiton is putting ALL EXPANSION PROJECTS ON HOLD ..

http://www.moneyweb.co.za/mw/content/en/moneyweb-mining?oid=606043&sn=2009+Detail

This surely needs to still sink in. There ares some who have written about it already but I don't believe the severity is sinking in. Governments want to stop Gold/Silver from rising but stupidly they are putting a lot of pressure on their resources, fewer and fewer countries become investable.

WE FOCUS ON THE DEMAND SIDE BUT THE SUPPLY SIDE IS THE REAL CANARY IN THE MINE.

SUPPLY side will be the rocket fuel - particularly as the precious metal miners are just hopeless. Whatever it is - the old story of Hedge Funds leaning on precious metal miners once again as highlighted by Jim Sinclair again (the story never changes)- the consequence of that is Supply will crunch even more and conversely the actual physical demand will increase even more.

So if we assumed that DEMAND supposedly was down 7% what effect has this year long consolidation had on SUPPLY - at least a comensorate 7% decrease?
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AnonymousFriday, 24 August, 2012
In regard to the Supply side.

BHP own's the third largest silver mine - Cannington Silver mine - this mine could be expanded but as per previous post above all, BHP capital expansion is on hold for year 2013.

10 biggest Silver mines

http://www.ibtimes.com/articles/267958/20111215/10-biggest-silver-mines-world-photos.htm#page1

Out of the ten biggest Silver mines listed - 3 are in Peru (stable government?), 1 in Bolivia (stable government?), 1 in Russia (is Russia exporting silver or keeping it?), 1 in Turkey (unstable middle east), 2 in Mexico, then Poland and Oz.
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AnonymousFriday, 24 August, 2012
Think people are starting to get fed up with the media?

Friday, August 24, 2012
Links 8/24/12
NC public service alert. Many readers were unhappy with how shabbily CNBC treated Neil Barofsky during an interview earlier this week. Reader Claire made this suggestion:
Google “CNBC contact Squawkbox” and it takes you to a form where it asks for a name and email address and then you can submit a comment to CNBC.
Unlike NPR’s form (which doesn’t allow any profanity) and which asks if your comment is positive, neutral or negative, you can submit uncensored comments to CNBC (with unlimited profanity) so you can let the CNBC talent know what you really think of them.
Not that anyone’s likely to read it, but you never know.
I once submitted a comment to CNBC in which I accused Joe Kernan of being a pimp to the banksters, and the next day he wrote me back and said I belong in jail.
In addition, this is Steve Liesman’s e-mail address: steve.liesman@nbcuni.com

Read more at http://www.nakedcapitalism.com/2012/08/links-82412.html#7G8kGea6LLDL0eRr.99
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Stock MarketMonday, 27 August, 2012
Thanks for sharing this information. I found it very informative as I have been researching a lot lately on practical matters such as you talk about.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.