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
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
Betting on Next British Prime Minister Tory Leadership Betfair Markets Forecast - 10th June 19
How Can Stock Market Go Up When We’re Headed Towards a Recession? - 10th June 19
If You Invest in Dividend Stocks, Do This to Double Your Returns - 10th June 19
Reasons for the Success of the Dating Market - 10th June 19
Gold Price Trend Analysis - Video - 10th June 19
US Stock Markets Rally Hard – Could Another Big Upside Leg Begin? - 10th June 19
Stock Market Huge Cosmic Cluster Ahead: Buckle Up! - 10th June 19
Stock Market Higher To Go? - 10th June 19
The Gold Price Golden Neckline… - 10th June 19
Gold Price Seasonal Trend Analysis - 9th June 19
The Fed Stops Pretending - 9th June 19
Fed Rate Cuts Soon; Bitcoin Enthusiasts Join Wall Street in Bashing Gold - 9th June 19
1990s vs. 2010s - Which Expansion Will be Better for Gold? - 9th June 19
Gold Price Trend Analysis, MACD, Trend Channels, Support / Resistance - 8th June 19
Gold Surges Near Breakout - 8th June 19
Could Gold Rally Above $3750 Before December 2019? - 8th June 19
5 Big Lies About Precious Metals Investing Exposed - 8th June 19
ADL Predictive Modeling Suggests A Big Move In Silver - 7th June 19
US China Trade War Will Start a Recession, or Worse… - 7th June 19
Land Rover Discovery Sport Brake Pads Expected Life, Worn Pads Dash Warning - 7th June 19
The Post Room Selfies Fun at Meadowhall Sheffield, From Game of Thrones to Desert Island... - 7th June 19
SAMSUNG - South Korean Electronics Giant - Investing in AI Stocks - Video - 7th June 19
Gold Price Rally or New Bull Market? - 7th June 19
Digging into the Rising Gold: Trade Tensions, Recessionary Worries and Dovish Fed - 7th June 19
The Risky Stocks Big Lie That Keeps Many Investors Poor - 7th June 19
Gold and HUI Short-term Strength Is a Strong Call to Action - 7th June 19
Fear Drives Stock Market Expectations - 7th June 19 - Chris_Vermeulen
Next British Prime Minister Tory Leadership Betting Markets - 6th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Is 2015 the Year US FED comes to the Aid of Gold and Silver Investors?

Commodities / Gold and Silver 2015 Jan 07, 2015 - 03:01 PM GMT

By: Peter_Degraaf

Commodities

In a moment we will provide our answer to this interesting question. 
The correction in the price of gold and silver is now in its fourth year, and in the words of W. D. Gann:  “When time is up – price will turn.”



     
Featured is the weekly gold chart.  The current bull market began in 2002 with gold at $260.  The correction that started in 2011 has retraced 50% of the rise from $260 to $1930.   You will notice that the latest drop to the 50% retracement level has been met with non-confirmation from the supporting indicators (blue arrows).  This includes the important A/D line which has been positive from day one.  Notice also the buildup in volume during the recent turnaround (green box).

“Which countries contain the most peaceful, the most moral, and the happiest people?  Those people are found in the countries where the law least interferes  with private affairs; where the government is least felt; where the individual has the greatest scope,   and free opinion the greatest influence; where the administrative powers are fewest and simplest; where taxes are lightest and most nearly equal;….where individuals and groups most actively assume their responsibilities and, consequently where the morals of human beings are constantly improving; where trade, assemblies, and associations  are the least restricted; where mankind most nearly follows its own natural inclinations; in short, the happiest, most moral, most peaceful people are those who most nearly follow this principle:  although mankind is not perfect, still all hope rests upon the free and voluntary actions of persons within the limits of right; law or force is to be used for nothing except the administration of universal justice.” ….. Frederic BASTIAT (From his booklet ‘The LAW’)


Featured is the index that compares mining stocks (GDX) to gold bullion (GLD).  The sure sign of a bull market is when the miners outperform bullion.  The breakout at the blue arrow, after price formed a double bottom at 0.15, - a breakout that is confirmed by the supporting indicators, - is very significant.  .  When this index is rising, it provides positive energy for both the mining sector and gold bullion.  The breakout target is at the green arrow.

 “When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it."  Frederic BASTIAT   
       

This chart courtesy Federal Reserve Bank of St. Louis.  At first glance the chart gives the appearance that the FED is reducing the Base.  On December 10th the money supply had dropped to 3.7 trillion dollars.  However by December 24th the Base rose back up to 3.9 trillion, (blue dot).  This oscillating is likely what is causing weakness in the DOW and S&P early in the New Year.  The last two times the Monetary Base stopped rising (notice the sideways action in this chart, which lasted several months); on each occasion the S&P dropped by 15%.   The FED officials are between a rock and a hard place.  If they tighten, it will cause the dollar to rise further, and the stock market will drop off a cliff.  If they allow the Base to increase, gold and silver will rise sharply.  The FED is unlikely to stand by and watch the dollar rise much further, (see next chart).


       
This chart courtesy John Mauldin’s popular E-letter (Mauldineconomics.com), shows the tight relationship between the US dollar (here inverted), and the price of oil.  The low oil price is putting a serious strain on a number of financial institutions, along with many energy producers.  The higher the dollar rises, the greater will be the strain.  The FED can (and very likely will), print dollars to end the current rise and thereby allow oil to seek its supply and demand level.   The printing press and the resulting currency destruction will provide energy for gold and silver.

“Liberty is the freedom of every person to make full use of his faculties, just as long as he does not harm other persons while doing so.”  …..Frederic BASTIAT

 
          
This chart courtesy Macrotrends.net shows the correlation between Assets at the Federal Reserve (blue), and the price of gold.  Historically the two travel together.  The current wide gap between the two can be resolved by either the FED reducing these assets (who would buy them? – these include ‘assets’ bought from banks during the 2008 crisis).  The expectation is that gold will soon play ‘catch up’.

  “The law can be an instrument of equalization only as it takes from some persons and gives to other persons.  When the law does this, it is an ‘instrument of plunder.’”  Frederic BASTIAT 



This chart is also courtesy Macrotrends.net.  It compares gold to the US Monetary Base.  When MB is rising (as now), while gold is correcting (as recently), this index turns lower and starts to warn us that gold is underpriced.  The current ratio at 0.31 is the lowest in over 100 years!  The time to sell gold is when this ratio is at 3.25 or higher.  The way to preserve purchasing power and to protect net worth, is to buy gold when it is cheap.  In order to ‘sell high’ we must first ‘buy low’.

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.

© 2015 Copyright Peter Degraaf - All Rights Reserved

DISCLAIMER:Please do your own due diligence.  Investing involves taking risks.  I am not responsible for your investment 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

6 Critical Money Making Rules