Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Bull Market – The Fuse Is Lit!

Commodities / Gold & Silver May 09, 2008 - 12:42 AM GMT

By: Peter_Degraaf

Commodities

Best Financial Markets Analysis ArticleMuch discussion has taken place in recent weeks, regarding the possibility that gold and silver might continue to sink to lower levels, as the summer doldrums set in.

Investors soon become shell-shocked with negative market analysis that looks at a half-full glass of water and refers to is as ‘half empty'.


They read about a member of the Federal Reserve Board who is quoted as saying that he is worried about inflation, and they interpret this to mean that the dollar is going to rise, and gold might fall, just because of that single comment. If the man was serious about his worry, he and his pals would be raising rates, not lowering them! Of course we know that their hands are tied, as the Fed cannot raise rates until the economy, especially the housing market, can handle higher rates.

The fact of the matter is that gold and silver are becoming more of a bargain on a daily basis . The reason is very simple: Every day, the central bank money spigots are spewing out at least ten times as much money, as miners are able to produce gold and silver!

Until this situation is reversed, the fundamentals will support higher prices.

Pull-backs or corrections usually swing too far in the opposite direction to the main trend, thereby providing opportunities for us to ‘buy the bargains'. This is the situation today.

For some examples of price increases:

  • Platinum has gone from 400.00 to 2,000.00, an increase of 400%
  • Copper from 0.75 to 4.00, an increase of 470%
  • Lead from 0.20c to 1.20, an increase of 500%
  • Uranium from 0.63 to 63.00, an increase of 530%
  • Crude oil from 12.00 to 124.00, an increase of 900%
  • Molybdenum from 2.50 to 32.50, an increase of 1300%
  • Rhodium from 400.00 to 9,400.00, an increase of 2200%

Many of these commodities are trading at all-time high prices!

By comparison, gold has crawled, from 260.00 to 880.00, for an increase of 338%. Gold is currently trading at 1/3 rd of its inflation adjusted previous high price.

Silver from 4.00 – 18.00 has increased by 350%

Silver is currently trading at 1/8 th of its inflation adjusted previous high price. That's right, silver has to increase by a factor of 8 times to reach 135.00, which is its 1980 price, when adjusted for inflation. And that's if you use the official CPI numbers. By using actual inflation data, the number is even higher.

Gold and silver are still bargains!

Charts courtesy www.stockcharts.com

Featured is the daily gold chart. The correction that started in mid-March ended at the Fibonacci 50% level. Price today broke out above the current downtrend line (blue arrow), and is now headed for higher levels. The 3 supporting indicators are turning positive (green lines). The 50DMA is in positive alignment to the 200DMA (green arrow), the sign of a bull market. THE FUSE IS LIT!

Featured is the weekly gold chart. The blue arrow points to the bottoming of the 7 – 8 week gold cycle. ‘X' marks the spot where the cycle missed, due to excessive bullishness. The cycle returned to normal on Friday May 2nd . The green arrow points to confirmation of the cycle. Unless gold closes below the thin purple line tomorrow, the upside breakout (green arrow), coming from beneath 8 weeks of resistance, will confirm the cycle bottom. (The thin dashed purple line connects the Friday closing prices).

The RSI is beginning to rise up from its support line (black arrow).

THE FUSE IS LIT!

Featured is the index that compares gold to oil. Since the mid 1960's the historical average has been 15.4 barrels of oil equals an ounce of gold. Today this index touched 7, indicating that 7 barrels will buy an ounce of gold. GOLD IS HALF PRICE COMPARED TO OIL! The blue arrow points to a positive closing price today. This may indicate that the trend is about to change. The index at 7.14 is 26% below the 200DMA, which is extreme. The RSI and MACD are deeply oversold (green lines).

THE FUSE IS LIT!

Featured is the daily silver chart. The correction which began in mid-March ended right at the Fibonacci 50% level. Confirmation will come at this Friday's close, providing silver closes somewhere near the green arrow, above the thin purple downtrend line, which connects the Friday closing prices for the past 9 weeks. The RSI is positive, and rising up from its support line (green line). THE FUSE IS LIT!

Featured is the CDNX index. The Juniors are ready to join the party! The index had its best day in over a month (green arrow), and is bouncing off a triple bottom (green lines).

The 3 supporting indicators are positive (blue lines). THE FUSE IS LIT!

Summary:

When you read a comment that is negative to a rising gold price, remember Gibson's Paradox: “When real interest rates (T-bills less CPI) are negative, gold will rise.”

This will keep you invested, while the bull rises in saw-tooth manner, ‘up two and down one'. To quote Richard Russell: “He who buys the dips, and rides the waves, wins in the end.”

By Peter Degraaf.

Peter Degraaf is an on-line stock trader, with over 50 years of investing experience. He issues a weekly alert to his subscribers. For a 60 day free trial, send him an E-mail itiswell@cogeco.net , or visit his website www.pdegraaf.com

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.


Post Comment

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