Tag: Gold (XAUUSDO)

Gold And Silver Could Diverge

Posted on by Aibek Burabayev

At the beginning of this month, I shared a warning alert as the silver chart had a Bearish divergence. The trigger was set below 50 on the RSI. It wasn’t activated, and gold and silver moved higher. Moreover, silver finally hits the target. The majority of readers kept a bullish outlook and got it right.

I prepared an update for you with the bonus chart at the end, so stay tuned.

Let’s start with the daily gold chart.

Gold Chart

Gold is slowly moving to the upside. It hasn’t shown any bearish signs as of yet. The metal finally elevated above the top of the preceding large consolidation beyond $1766 (black dashed line), eliminating the option of another leg down within an even more extended consolidation. Continue reading "Gold And Silver Could Diverge" →

"Diamond" Pattern Pushed Gold To Sky Vs. Silver

Posted on by Aibek Burabayev

I appreciate active readers of the Blog for leaving valuable comments on Gold and Silver posts. Recently, there have been a lot of thoughts shared not only about the metals itself but also about its relationship reflected in the dynamics of the Gold/Silver ratio. I think it’s time to talk about it in this post. Please feel free to enrich this piece with your valuable thoughts in the comments section.

Back in December 2014, I shared only the third post here on the Blog. The title was more appropriate for a science fiction novel as it promised the “journey to the Moon” for the Gold/Silver ratio as it was going to hit the 109 ounces. Below is that very chart from the distant 2014 to refresh the memory.

gold silver

The idea was based on the “Diamond” pattern spotted on the monthly chart (blue). The target was reached more than five years later on the 16th of March this year. The total gain is equal to 109 - 72 = 37 troy ounces of silver per troy ounce of gold or 51% in five years.

Let’s see in the weekly chart below the ratio dynamics after that post. Continue reading ""Diamond" Pattern Pushed Gold To Sky Vs. Silver" →

Silver Could Take Gold Down With Bearish Divergence

Posted on by Aibek Burabayev

I was watching top metals closely as their price dynamics didn’t convince with sharp zigzags up and down, which are more appropriate during market consolidations, not trends. When silver hardly tagged the former top on the 1st of July, I got cautious. So, this post is aimed to share with you a warning alert for top metals as I spotted a Bearish signal on the silver chart. I will start with its daily chart below to show you the details.

Silver
Chart courtesy of tradingview.com

“Silver was a gamechanger” in April as then it finally revealed its structure with a sharp drop and the following V-turn, which indeed changed the game for both top metals since then. This time again, it shows a leading Bearish indicator ahead of gold. Continue reading "Silver Could Take Gold Down With Bearish Divergence" →

Gold Sector Correction Is Maturing

Posted on by Gary Tanashian

Gold Stock Seasonal Average

The HUI Gold Bugs index has over the last 2 decades (encompassing both bull and bear markets) tended to bottom in July per stockcharts.com's data for the index. A seasonal average is not a directive, but it is a (+/-) guide to be factored. Last year gold stocks bottomed in May as we caught what would be a violent upswing. This year I expect the low to be in June or July.

Why Gold?

As the stock market’s broad relief rally lumbers on, drawing the ire of bears that think it should be otherwise, a chorus of dissenting voices is blaming legions of shut-in Millennials and their Robinhood trading accounts for the excess. Maybe that plays a small part.

But here I’ll repeat that the Fed is balls-out printing money (really funny munny), manipulating Treasury and Corporate bonds and stating that it will have virtually no limits in this MMT (I would turn around MMT to call it what it actually is, TMM or Total Market Manipulation). They can give it a fancy name like Modern Monetary Theory but by any other name, it is chicanery and a scam that society will suffer the fallout from someday.

They are cheapening the munny units in order to give the appearance of rising asset (especially stock asset) units. Say it again… “they are cheapening the munny units in order to give the appearance of rising asset units.”

Hence, gold. The shiny rock, the bullion, the anchor to monetary sanity. In this surreal monetary realm, it is something real.

The goal of investing in or trading the gold mining sector is to capitalize on the desperate actions of monetary and fiscal policymakers vs. gold’s stability. Last week we covered a lot of details: Gold Stock Correction and Upcoming Opportunity. No need to repeat the details. People who know how to play this sector have been patiently managing the correction (whether that means selling into it, buying during it, being psychologically prepared for it, etc.) and planning for its end.

We keep a long list of quality miners, explorers, and royalty charts updated every week in NFTRH for this very outcome; an end to the correction and the next phase of gold’s bull market, which it is consolidating now, per this daily futures chart. If the negative RSI divergence does not resolve into a sharp drop soon it is going to then be big-time fuel for what could be a hysterical run-up to the 1940 target and possibly beyond.

Gold had become over-loved by financial refugees in March. They are now buying stocks again.* That is perfect because they should not be aboard the next phase. Their role will again be too knee-jerk and chase later on. Despite the consolidation since March, the daily chart (via TradingView) shows a completely intact situation at the up-trending 50-day average.

gold

Gold/SPX Ratio

I’ll leave you with one final chart. There has been a reason gold has underperformed the stock market since the terror of early spring. That reason is because cyclical asset markets are and have been on a massive sentiment relief rally and sentiment will do what it will do in the short-term. Just remember that simple fact when you see the inevitable rationale like this that certain interests will try to feed you: Here Come the Golden Ghost Stories.

Gold/SPX has done a great job of taking out the excess while remaining intact. 5-year chart…

gold spx ratio

The Not So Great Reset

Lunatics far and wide talk about something called “The Great Reset” but that too is tin foil, whether aspects of it are true or not. It does not help your market management to have that crap in your head. Instead, let’s boil down the picture to the gold sector and realize that as the terror-stricken sentiment of March and April is being reset, so to is the over-enthusiastic sentiment in the gold sector.

The next bull phase should be arriving before long.

* I have been selectively long the stock market since March as well, but very aware of the gathering risks, which I personally and the NFTRH service manage accordingly.

Check back to see my next post!

Best,
Gary Tanashian
nftrh.com

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Gold Stock Correction And Upcoming Opportunity

Posted on by Gary Tanashian

Before updating the status of the gold miner (HUI) correction, let’s take a quick review of the Macrocosm because it’s always a good time to be clear on important macro considerations.

The graphic makes the following points that are the foundation of the NFTRH view on the right/wrong times to be fundamentally bullish on the gold-stock sector. In order of priority, a bullish view needs:

  • A contracting economy, which…
  • Drives counter-cyclical gold higher vs. stock markets (and many other assets), and…
  • By extension, sees a general decline in economic and market confidence.
  • When an economic boom phase ends, yield curves bottom and start to steepen.
  • Gold rises vs. commodities and materials, some of which represent mining costs.
  • Gold rises vs. all major currencies, which is also a sign of declining systemic confidence.
  • Inflation expectations can be constructive for gold and especially silver, which drives ‘inflationist’ bugs into gold stocks, but this is not fundamentally positive if the inflation is cyclical and drives commodities like energy and materials more than gold. This is when gold stocks rise against their proper fundamentals. *
  • Cyclical inflation, as in 2003-2008 can see the sector rise strongly (HUI was approximately +300% in that period) but the end will be bloody, as per the Q4 2008 sector cleanout.
  • China/India “love trade”: Hahaha… when you see this in writing, run away from it.

Continue reading "Gold Stock Correction And Upcoming Opportunity" →