Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Increasing Sovereign Bailouts and Worsening Economy Boost Gold and Silver

Commodities / Gold and Silver 2010 May 10, 2010 - 10:17 AM GMT

By: Captain_Hook

Commodities

Best Financial Markets Analysis ArticleMore than the perception increasing sovereign bailouts in a worsening economy around the world will bolster precious metals moving forward, countries that are still paying their bills will need to have greater percentages of gold in reserve in order to maintain any semblance of currency stability in what might escalate into quasi-hyperinflation despite what faulty money supply measures will have the consensus believe. This is why gold is rising in the collective faces of the deflationists, and why it will continue to confound such views. It’s because the gold is gone and in short supply in a world that will need it to facilitate currency stability and trade increasingly; this, as confidence in governments and bureaucracies around the world are called into question.


The following is commentary that originally appeared at Treasure Chests for the benefit of subscribers on Tuesday, May 4th, 2010.

An actual breakup of Goldman Sachs (GS) would hasten process in this regard, because not only of the perception US market-making abilities will be harmed; but more, because market rigging will be far more difficult, which could spark a run on physical precious metals. And this risk would be heightened considerably if talk of the Justice Department (DOJ) going after JP Morgan, the other central market rigger in the US, for it’s concentrated short position in the silver market proves to be more than a ploy, which could double prices overnight under the right conditions. Jim Richards, who understands the workings of the bureaucracy well due to his experiences throughout the years, is keeping tabs on process here as it unfolds, which one can monitor if you are on Twitter.

Of course the thing that is most significant in my mind about all this is we finally have the circumstance set to push the Dow / Gold Ratio down away from double digits at 10 towards the next significant interval at 5, halving the measure yet again. And as alluded to a few weeks back, this process should get underway in earnest once the S&P 500 (SPX) / Gold Ratio finally breaks below unity, which you can take as a ‘buy signal’ the move to 5 in the Dow / Gold Ratio has been triggered. Now this may be all technical stuff to you, but for me, who has watch numerous instances throughout the last couple of years that were sufficient in my mind to accomplish such a feat, to finally see things get rolling in this regard – such considerations are paramount in my mind right now even though this subject matter might not be as interesting, or comical, as watching Lloyd Blankfein putting his foot in mouth yet again. (i.e. he is most famous for saying GS is ‘doing God’s work’ last year attempting to justify the excessive bonuses they were able to pay themselves after defrauding their own client base unquestioned at the time.)

Anywho, the above was an optimist’s view of things moving forward. And now for something completely different – how about a good dose of reality and a look at how things could go very wrong. How could they go wrong? Well, for starters, yesterday precious metals shares were down against rising commodity prices, which could turn out to be the start of a more profound correction in concert with the broader measures of equities. In this regard, there is a diamond in the daily SPX chart, which should break to the downside if history is a good guide. (i.e. diamonds at the top or bottom of a range are reversal patterns.) If this occurs, then the bearish engulfing weekly pattern (an outside down week closing below the trading range of the previous week) will be confirmed, and a potential intermediate degree correction would be signaled, at a minimum.

And again, if gold cannot ‘keep on trucking’ higher this week despite any weakness in stocks, this would be troubling, especially if it were to make a b-line for $1100 before vexing $1200. Now I may just be a worrywart, however there are no long-term bond auctions this week, meaning gold should be doing well. The fact it’s not, and that the shares are leading lower opens the door to a potential reversal week here too, which would be disturbing to say the least given May is usually a strong month for precious metals. What’s more, if gold and silver were to reverse lower this week after the leak the DOJ is finally going to address JP Morgan’s concentrated short position in silver that the Fed (and rest of the bureaucracy) have been using to suppress precious, conspiracy theory thinkers could conclude this news was planned as justification for falling prices would be provided by a weaker macro environment.

Figure 1

Be this as it may, with open interest for paper gold approaching a record, one must take this risk seriously, especially considering both precious metal and related equity indexes are on a potentially significant time-line turn, as can be seen above in Figure 1 on the monthly Amex Gold Bugs Index (HUI) plot from the Chart Room. Now with US index open interest put / call ratios supportive of continued buoyancy in stocks moving into options expiry on May 21 any weakness over the next few days could definitely be a head fake, however another bad weekly close in the broads accompanied by precious metals would definitely make it difficult to be bold on such a possibility afterwards, and only as options expiry got much closer. A look at the weekly Philadelphia Gold and Silver Index (XAU) plot from the Chart Room confirms care should be taken as well with a potential channel recapture failure at hand. (See Figure 2)

Figure 2


Unfortunately we cannot carry on past this point, as the remainder of this analysis is reserved for our subscribers. Of course if the above is the kind of analysis you are looking for this is easily remedied by visiting our web site to discover more about how our service can help you in not only this regard, but also in achieving your financial goals. As you will find, our recently reconstructed site includes such improvements as automated subscriptions, improvements to trend identifying / professionally annotated charts, to the more detailed quote pages exclusively designed for independent investors who like to stay on top of things. Here, in addition to improving our advisory service, our aim is to also provide a resource center, one where you have access to well presented 'key' information concerning the markets we cover.

And if you are interested in finding out more about how our advisory service would have kept you on the right side of the equity and precious metals markets these past years, please take some time to review a publicly available and extensive archive located here, where you will find our track record speaks for itself.

Naturally if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line. We very much enjoy hearing from you on these matters.

Good investing all.

By Captain Hook

http://www.treasurechestsinfo.com/

Special Note: Figure Source: Schaeffer Research

Treasure Chests is a market timing service specializing in value-based position trading in the precious metals and equity markets with an orientation geared to identifying intermediate-term swing trading opportunities. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested in discovering more about how the strategies described above can enhance your wealth should visit our web site at Treasure Chests

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2010 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

Captain Hook Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules