Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Will You Make Money in the New Silver Bull Market ? - 13th Aug 20
Hyper-Deflation Capital Destruction And Gold & Silver - 13th Aug 20
Stock Market Correction Approaching - 13th Aug 20
Silver Took the Stairs to $21 in 2008, Took Escalator to $29 2010. Is Silver on Elevator to 120th floor today? - 13th Aug 20
President Trump Signs Additional COVID Relief – What To Expect from the Markets - 13th Aug 20
Has Gold's Upward Drive Come to an End? - 13th Aug 20
YouTuber Ads Revenue & How to Start a Career on YouTube - 13th Aug 20
Silver Notches Best Month Since 1979 - 12th Aug 20
Silver Shorts Get Squeezed Hard… What’s Next? - 12th Aug 20
A Tale of Two Precious Metal Bulls - 12th Aug 20
Stock Market Melt-Up Continues While Precious Metals Warn of Risks - 12th Aug 20
How Does the Gold Fit the Corona World? - 12th Aug 20
3 (free) ways to ride next big wave in EURUSD, USDJPY, gold, silver and more - 12th Aug 20
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold and Misery, Strange Bedfellows

Commodities / Gold and Silver 2015 Mar 31, 2015 - 04:05 AM GMT

By: Dan_Norcini

Commodities

Overhead chart resistance centered between $1225-$1220 has proven to be a bride too far for the gold market. That region has now been confirmed with today’s plunge as a formidable barrier that gold bulls will have to overcome if there is ever going to be anything besides “boring” in the gold market anytime soon.


Notice on the ADX/DMI, that the short-lived move higher coming off the heels of the FOMC statement has seen the ADX turn down, as well as the +DMI. Also, the RSI has failed at the 60 level, a level which tends to hold bear-market rallies.

I still go back to the fact that gold is moving inversely to the yield on the Ten Year Treasury note. When interest rates rise, as they did today, gold tends to struggle. An offshoot to the higher rates is strength in the US Dollar, which also pressures gold.

It will be interesting to see if the next update on reported holdings of GLD shows yet another decline.

Here is a weekly chart of gold showing that it remains well inside the channel that has held it since the summer of 2013. First level of support remains near $1180. Below that another layer of support emerges near $1150-$1145.

The gold shares remain a giant TRAIN WRECK.

Why anyone would want to own these juniors in particular escapes me. The chart is atrocious as they remain in the red on the year.

Lastly along this line, the GDXJ/Gold ratio continues to head in its favorite direction, namely lower.

By the way, a few random thoughts about gold and its proponents. Most of you know by now, that I regard gold as INSURANCE; nothing more and nothing less. It is simply another asset class. Sometimes it is in favor and does well; sometimes it is out of favor and does not do well.

Many gold bugs seem to forget that gold can go long, long periods doing absolutely nothing to improve ones portfolio. Think about the 20 long years from 1980 to 2000-2001 when gold went nowhere but down. For twenty long years, those who had pinned their investment hopes exclusively on gold, missed huge opportunities to grow their wealth by diversifying. Yet, many of them who remained bullish for those twenty years, believed that they were rewarded for keeping the faith. They cite the fact that gold rallied from near $250 to slightly over $1900 in 2011 as proof that it pays to own gold.

That would be true but that assumes that one who bought gold actually SOLD IT and captured the profits. The problem with gold bugs is that one never or at least rarely, hears them talking about doing just that. For them, it is always onward and upwards to the next new high, even if it takes 20 years to get there. That most did not sell and capture the gain, means that they have lost nearly half of any paper gains that they might have made back in 2011.

I do not know about the rest of you, but watching any investment lose 50% of its value is a sure-fire method of short-circuiting any chance of making serious progress in one’s long term investment strategy.

I guess what I am saying here is that for some reason, gold tends to feed the pessimistic streak in all of us. Think about it – for one to be bullish gold, it means that one must also be negative towards the entire financial system or at the very least, the US Dollar. That translates into what I believe is an unhealthy OBSESSION with bad news.

Driving in my truck today, I heard yet another one of those “quick – head for the hills because the Dollar is going to crash”, annoying ads that **** Capital seems to love to unleash upon us. This time it is all about “Alan Greenspan’s warning of financial instability”, so hurry up and load the boat with more gold. After enough of these, one soon gets a feeling of nausea and disgust that it is the same thing, time after time, year after year, with these people. “The entire world is going to end tomorrow so make sure you spend lots of your money buying gold from us.”

This is also why some of you who are on the mailing lists of these many gold cult members who infest the internet, will almost daily find your email inbox filled with one story after another about how bad this is, or how bad that is, or how soon this will collapse or how soon that will collapse. Each piece of economic news that seems to indicate slowing growth is therefore heralded as if it is some precursor of what is a guaranteed soon-to-be financial Armageddon.

This is to be expected for the reason I noted above – in order for one to be bullish gold, one must, by necessity, be hoping for bad news. That strikes me as a particularly depressing way of going through life.

Please do not misunderstand what I am saying here – one can hold the yellow metal as a form of insurance without having this perversely depressing morbid outlook on life that seems to infect so many gold bugs. After all, most of us have insurance on the homes we own or against catastrophic health issues, or our cars, or life insurance. But here is the difference – those who are MENTALLY stable NEVER, NEVER, NEVER actually HOPE to collect on it. We buy it hoping the exact opposite, namely, that we will NEVER NEED it.

What would our lives consist of if we transferred the mental state that marks the average rabid gold bug to our home, auto, life or health insurance? That means I would be cheering that the fire in my next door neighbor’s home would spread to mine. It means that I would be anxious to get the same horrible disease that some friend or acquaintance was unfortunate enough to be smitten with. It means that I would be anxious for the car wreck, all so that I could collect on my auto insurance coverage. It I think you see my point. Foolish it is not? Seriously, what would you think of any such person with those sorts of HOPES who would fill your email box with stories about fires in his neighborhood and sounded actually excited about the prospect???

Serious-minded investors/traders must avoid falling into this sort of mentality. Remain objective, level-headed and above all, watch out for the sensationalism that pervades the world of the gold bugs. Buy some gold, hold it for insurance, and then get on with your investing life! You’ll be a lot happier an and a lot more fun for family and friends to be around.

Dan Norcini

http://traderdan.com

Dan Norcini is a professional off-the-floor commodities trader bringing more than 25 years experience in the markets to provide a trader's insight and commentary on the day's price action. His editorial contributions and supporting technical analysis charts cover a broad range of tradable entities including the precious metals and foreign exchange markets as well as the broader commodity world including the grain and livestock markets. He is a frequent contributor to both Reuters and Dow Jones as a market analyst for the livestock sector and can be on occasion be found as a source in the Wall Street Journal's commodities section. Trader Dan has also been a regular contributor in the past at Jim Sinclair's JS Mineset and King News World as well as may other Precious Metals oriented websites.

Copyright © 2015 Dan Norcini - All Rights Reserved

All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. The information on this site has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any information on this site without obtaining specific advice from their financial advisor. Past performance is no guarantee of future results.

Dan Norcini 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