Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21
US House Prices Momentum Analysis - 20th Feb 21
The Most Important Chart in Housing Right Now - 20th Feb 21
Gold Is the Ultimate Reserve Asset - 20th Feb 21
Is That the S&P 500 And Gold Correction Finally? - 20th Feb 21
Technical Analysis of EUR/USD - 20th Feb 21
The Stock Market Big Picture - 19th Feb 21
Could Silver "Do a Palladium"? - 19th Feb 21
Three More Reasons We Love To Trade Options! - 19th Feb 21
Here’s What’s Eating Away at Gold - 19th Feb 21
Stock Market March Melt-Up Madness - 19th Feb 21
Land Rover Discovery Sport Extreme Ice and Snow vs Windscreen Wipers Test - 19th Feb 21
Real Reason Why Black and Asian BAME are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 19th Feb 21
New BNPL Regulations Leave Zilch Leading the Way - 19th Feb 21
Work From Home Inflationary House Prices BOOM! - 18th Feb 21
Why This "Excellent" Stock Market Indicator Should Be on Your Radar Screen Now - 18th Feb 21
The Commodity Cycle - 18th Feb 21
Silver Backwardation and Other Evidence of a Silver Supply Squeeze - 18th Feb 21
Why I’m Avoiding These “Bottle Rocket” Stocks Like GameStop - 18th Feb 21
S&P 500 Correction Delayed Again While Silver Runs - 18th Feb 21
Silver Prices Are About to Explode as Stars are Lining up Like Never Before! - 18th Feb 21
Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT - 18th Feb 21
Crypto Mining Craze, How We Mined 6 Bitcoins with a PS4 Gaming Console - 18th Feb 21
Stock Market Trend Forecasts Analysis Review - 17th Feb 21
Vaccine Nationalism Is a Multilateral, Neocolonial Failure - 17th Feb 21
First year of a Stocks bull market, or End of a Bubble? - 17th Feb 21
5 Reasons Why People Prefer to Trade Options Over Stocks - 17th Feb 21
The Gold & Gold Stock Corrections Are Normal - 17th Feb 21
WARNING Oculus Quest 2 Update v25 BROKE My VR Headset! - 17th Feb 21
UK Covid-19 Parks PACKED During Lockdown Despite "Stay at Home" Message - Endcliffe Park Sheffield - 17th Feb 21
How to Invest in ETFs in the UK - 17th Feb 21
Real Reason Why Black and Asian Ethnic minorities are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 16th Feb 21
THE INFLATION MEGA-TREND QE4EVER! - 16th Feb 21
Gold / Silver: What This "Large Non-Confirmation" May Mean - 16th Feb 21
Major Optimism for Platinum, Silver, and Copper - 16th Feb 21
S&P 500 Correction Looming, Just as in Gold – Or Not? - 16th Feb 21
Stock Market Last pull-back before intermediate top? - 16th Feb 21
GAMESTOP MANIA BUBBLE BURSTS! Investing Newbs Pump and Dump Roller coaster Ride - 16th Feb 21
Thinking About Starting to Trade This Year? Here Are Some Things to Keep in Mind - 16th Feb 21
US House Prices Real Estate Trend Forecast Review - 15th Feb 21
Will Tesla Charge Gold With Energy? - 15th Feb 21
Feeling the Growing Heat and Tensions in Stocks? - 15th Feb 21
Morgan Stanley Warns Gasoline Industry Is About to Become Totally Worthless - 15th Feb 21
Debts Lift Gold - Precious Metal Prices Will Rise on a Deluge of Red Ink - 15th Feb 21
Platinum Begins Big Breakout Rally - 15th Feb 21
How to Change Car Battery Without Losing Power, Memory, Radio Code Settings - 15th Feb 21
Five reasons why a financial advisor can make a big difference to your small business - 15th Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold and Silver Bullish Omens

Commodities / Gold and Silver 2012 Jul 31, 2012 - 08:48 AM GMT

By: Peter_Degraaf

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleThis chart courtesy Mises.org shows the true U.S. money supply. The trend is exponential and this trend may well put pressure on gold and silver to rise in response. According to Erste Group Research the combined Base Money Supply of the four most important Central Banks has been growing at 15.2% per year since 2000!


“This Currency, as we manage it, is a wonderful machine. It performs its Office when we issue it; it pays and clothes Troops, and provides Victuals and Ammunition; and when we are obliged to issue a quantity excessive, it pays itself off by Depreciation.” .....Benjamin FRANKLIN


Featured is the weekly gold chart with a five year perspective. Price is breaking out in similar fashion to the breakout in 2009 - after the 2008 pullback. The supporting indicators are bouncing up from support levels (green lines).
.....On Friday the bullion dealer Standard Bank noted: “There currently is a large short position in Comex gold. Since 2004 (when physically backed gold ETFs were introduced to the market), there have been just five times that the size of the Comex gold non-commercial short positions stood out.”
Three of these short spikes were followed by subsequent gains of 25%, 23% and 36%. The exception was the crash year of 2008. In that case gold did nothing for three months — and then rose 19%.


Featured is the weekly gold chart with the Accumulation/Distribution line at the top. Notice how a rise in the A/D line is almost always matched by a rise in the gold price. The latest jump in the A/D line is not (yet) matched by gold. The expectation is that unless the A/D line should suddenly decline, gold is likely to advance. According to the Financial Times of July 19th, the Shanghai Gold Exchange on August 31st will open to investors from many parts of the world. At the present time this exchange is open only to a few selected parties. By opening up the exchange, the gold exchanges of London and New York will face some serious competition.

“The greatest shock of this decade is that more people are about to lose more money than at any time before in our history. And the second biggest shock will be the incredible amount of money just a relatively small group of people will make at exactly the same time.” …Larry BATES (Author of ‘The New Economic Disorder’)

This chart courtesy Cotpricecharts.com shows the number of ‘net short positions’ among commercial gold traders declined from 159,000 to 136,000 this past week. It also shows the hedge funds and large speculators (grey bars) are not yet heavily loaded up with gold contracts. This chart is ‘gold-bullish’.

“Money is too important to be left to central bankers. You essentially have a group of unelected people who have enormous power to affect the economy. I propose replacing the Fed with a laptop computer to calculate the monetary base, and set it to expand it by a predictable 2% per year through war, peace, feast or famine.” .....Milton FRIEDMAN.


Featured is the daily bar chart for TIP, the bond fund that is indexed for inflation. The price of gold is at the top. Usually, whenever TIP produces a rally it coincides with a rising gold price (five out of five during the past two years). Tip has been rising since April and gold has not (yet) followed. That may change, especially if TIP should continue to bounce off the rising 50DMA.

“Gold is an expression of the world's justifiable distrust of the way our central bankers conduct their affairs.” …..Jim GRANT.

Featured is the daily silver chart. Buying interest in physical silver at 26.00 is providing a floor that has held since October. The CCI at bottom of chart has turned positive (green uptrend line). The silver price is breaking out at the green arrow. The RSI at top of chart displays a bullish inverted ‘head and shoulders’ pattern with the neckline at the blue arrow. This neckline appears ready to give way to the upside. The fact that silver was able to outperform gold on Monday July 30th is a bullish omen.
According to the USGS the total amount of silver mined in history is about 46 billion ounces. This compares to about 5 billion ounces of gold. This ‘mining ratio’ is 9 to 1. The current ‘trading ratio’ is 57 to 1. The ratio is clearly out of whack. In view of the fact that most of the silver consumed by industry is ‘used up’, the expectation is that the ratio could narrow dramatically in the years ahead. Silver usage in the solar industry is expected to rise to 100 million ounces by 2015, compared to 50 million ounces in 2010 (source: Silver Institute).

“In a bull market, every time price comes near or below the 200 day moving average, it represents a buying opportunity.” ….Joseph GRANVILLE.

Featured is PSLV the Sprott silver trust. The pattern is a bullish falling wedge. A breakout at the blue arrow sets up a target at the green arrow. A breakout there turns the trend bullish. At the top of the chart is the RSI. Just as in the silver chart above, an inverted ‘head and shoulders’ pattern is visible. This is a bullish pattern and a rise above the black arrow could turn into a strong move for PSLV. ‘Up volume’ is building. The premium over bullion is still low at just 3.03%.

“Money is the most important subject intellectual people can investigate and reflect upon. It is so important that our present civilization may collapse, unless it is widely understood, and its defects remedied very soon. ….. Robert H. HEMPHILL, (Former credit manager, Federal Reserve Bank of Atlanta, GA).


This chart courtesy Sprottphysicalbullion.com shows the premium of PSLV over bullion. By comparing this chart to the PSLV chart above, we find that when the premium rises to 25% or higher, it is time to take profits. When the premium drops below 5% (as now), it is usually a good time to buy silver. According to the U.S. Geological Society: “Silver will be the first element in the periodic table that will become extinct”.

Gabirol, Ibn: “There are four kinds of men in this world:
1. The man who knows, and knows that he knows; he is wise, so consult him.
2. The man who knows, but does not know that he knows; help him to not forget what he knows.
3. The man who knows not, and knows that he knows not; teach him.
4. Finally there is the man who knows not, but pretends that he knows; he is a fool, therefore avoid him.”

Happy trading!

By Peter Degraaf

Peter Degraaf is an on-line stock trader with over 50 years of investing experience. He issues a weekend report on the markets for his many subscribers. For a sample issue send him an E-mail at itiswell@cogeco.net , or visit his website at www.pdegraaf.com where you will find many long-term charts, as well as an interesting collection of Worthwhile Quotes that make for fascinating reading.

© 2012 Copyright Peter Degraaf - All Rights Reserved

DISCLAIMER: Please do your own due diligence. I am NOT responsible for your trading decisions.

Peter Degraaf Archive

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


Comments

JasonS
02 Aug 12, 07:48
Silver 'extinct'

I hate that comment, 'Silver will be the first element to become extinct' It is simply not true. Whether silver is in the landfills or in bullion bars and coins or in old used bandages and broken mirrors, it is still on planet Earth, and therefore, NOT extinct. It has just been dug up and reburied. Until we start sending all our silver into outer space, please stop quoting that USGS statement.


Post Comment

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

6 Critical Money Making Rules