Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19
Phase 1 of Stock Market Correction - 11th Mar 19
Long Awaited Stock Market Pullback has Finally Arrived - 11th Mar 19
US Presidential Cycle and the Stock Market - Video - 11th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - 11th Mar 19
Chinese Economic Data Shakes the Global Stock Markets - 11th Mar 19
The Fed Is Playing a Dangerous Game - 11th Mar 19
The Stock Market Has Called the Fed’s Bluff, What’s Next? - 11th Mar 19
Turkey Holiday Bazaar Extreme Jewelry Price Haggling - Fethiye Market - 11th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

Gold Bullion Extended, Miners Just Beginning Potential Breakout

Commodities / Gold & Silver Stocks Sep 02, 2011 - 03:14 AM GMT

By: Jeb_Handwerger

Commodities            The action in the precious metals raises speculations of interest to Gold Stock Trades subscribers especially in the labyrinth created by a fear driven market.  Gold at this time is participating in a runaway move past resistance.  Although gold has reached new record highs it may be stalling in its attempt to continue moving parabolic, while the undervalued miners play catch up.  What may this hesitation signal and shrinking of the divergence between miners and bullion mean to my readers? 


           Technically, it may be informing us that the bull move so many analysts are expecting is somewhat mature in gold bullion but miners are just beginning to breakout.  Much like a sprinter who first moves backwards in his running block in order to propel his thrust forward, gold may initially have to come down from its technical heights in order to amass the energy required for a more pronounced forward move.  The bull headed minotaur of bullion may have to take a time out to rest, while the miners such as Goldcorp(GG), Newmont(NEM) and Barrick(ABX) play catch up as they look poised to break out of the running blocks. 

           Its been a long run for the beast since our late January 2011 Buy Signal.  Make no mistake Minos will rise refreshed to make another run to higher highs.  A brief retreat for gold bullion to long term trend support would be of no surprise.  Indeed, it may represent a healthy and necessary correction in what we view as the ongoing highway of the long secular rise.  These thoughts should not be regarded as bearish analysis at all.  Instead they are being presented as a technical and healthy possibility to eliminate current media hyped precious metals euphoria and avoid buying gold bullion at an interim top.  Instead we suggest looking into the undervalued miners just beginning a potential major move.

           Gold Stock Trades must include any and all eventualities.  How pleasant it would be if the ultimate path to riches was one straight move higher.  Investing does not work like that.  Markets are fickle and they do everything they can to confuse, misdirect and obfuscate the speculator.  Precious metals investors must follow bullion and the mining equities as everything has its season.  It appears to be the miners time under the sun.

           US Treasuries (TLT) have reached record highs reflecting the irrational fear of U.S. debt as a safe haven.  Gold (GLD) markets are ebullient as the media scares us with the bugaboos of horrific possibilities that may never come to pass.  Your attention is also called to the falling U.S. dollar (UUP), which appears to be on the verge of breaking into record lows.  It remains to be seen whether the panic in the greenback is just around the corner, as investors fear what impact QE3 will have on the currency.  One might have expected the U.S. dollar to be an iron clad safe haven during the market decline in August but it was not.

           Such negative action may mirror inflationary decisions regardless of whatever compromises reached.  There is a sense that inflation is in the offing and that now only a bandaid will be applied to staunch the bleeding of an economy in trouble.  

           In the background, is the ever present figure of The Fed which is taking whatever steps necessary to prime the pump to give us de facto quantitative easing in whatever guise is necessary to feed the Minotaur.  For the present, a compromise may materialize, sufficient to take us to the next election in 2012, when the whole song and dance will be reprised in a repetitious third act. 

           Preparations are being made for further downgrades of the U.S. AAA credit rating, which may affect the security of treasuries (TLT) as a safe haven.  As speculators are entrapped by the fear of bad news there may be a rush to the safe havens of gold(GDX) and silver(SIL) miners, possibly uranium(URA) and rare earth(REMX) miners as well.  Such developments may be leaving these sectors as the only players left standing on the field.   Stay tuned to my daily bulletin to keep track of these exciting sectors.

Disclosure: Long NGD, GLD, SLV, GDX

By Jeb Handwerger

http://goldstocktrades.com

© 2011 Copyright Jeb Handwerger- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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