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
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why Gold Bugs Need to Stop Listening to The Fear Mongers and Start Thinking for a Change

Commodities / Gold and Silver 2016 Apr 27, 2016 - 03:40 PM GMT

By: Sol_Palha

Commodities

He that can have patience can have what he will. ~ Benjamin Franklin

We are still not convinced that Gold is fully out of the woods. Peter Schiff is busy telling everyone that it was a bad idea to have sold Gold in 2011, we beg to differ for the trend indicates otherwise, and so does the price of Gold. He is coming out with scary scenarios though they are not as grandiose as James Sinclair's scenario that calls for Gold to move to $50,000 an ounce. Even, when we dream we find it hard to envision such a price, so it is interesting that he can come up with such targets without being under the influence of some strong medicine.


This is nothing but fear mongering, and the markets are ruthless to those who are driven by fear or euphoria. If Gold were to trade to $50,000 an ounce, you would be living in a cave with bats and guns, as the world as you know it would have fallen apart. Individuals like this fool the idiotic fashion hard money crowd into thinking Gold is the solution to all their problems. We use the word fashion because they know just enough about hard money for it to be dangerous to their health and wealth.

As long as man does not evolve, man will find a way to rob from Peter and Paul. So Gold standard or rubbish standard matters not for you need to change the mindset of the beings that control either medium. A little knowledge is extremely dangerous and worse than ignorance and most of the hard money crowd understands next to nothing when it comes to Fiat money. That is why the Fed gave the hard money crowd a thrashing that they will never forget. It inflated the money supply to mind-boggling levels, strengthened the dollar and Hammered Gold. How did they achieve this feat? They controlled the velocity of money, and they were able to have their cake and their pie. Now they are buying up Gold at a lower price with the extra worthless paper they created while the hard money experts keep chanting nonsense that the Fed is backed into a corner.

If it's a corner, it must be a pretty cushy corner with all the comforts of a five-star hotel. The Fed is run by extremely intelligent albeit nefarious individuals. Gold has not fared all that well in the face of a weak dollar (take a look at the charts below), and most of our indicators are now in the extremely overbought ranges. The trend is still neutral, but as it moved from negative to neutral, we will not be satisfied till it turns bullish. It goes without saying Gold will experience another strong correction, the only question that remains is whether the correction will end with a higher low or a lower low on a monthly basis. A lower low will indicate that a bottom is not in, and more consolidation is necessary; a higher low will indicate that a bottom is in place and that the trend is likely to change direction.

The charts provide some interesting data

Daily Gold Chart

Note that Gold has been putting in lower highs since March and it has also triggered several negative divergence signals on the chart.

US Dollar Index Daily Chart

From Feb to March of 2016, Gold responded in the correct manner, as the dollar traded lower, it traded higher. After that, the situation changed, and Gold has been putting lower highs while the dollar has traded to new lows. This indicates that one market is out of sync, and this market is Gold. Thus, the dollar is likely to bottom and rally again, while the rally in Gold is likely to fizzle out. This initial strength in Gold is the perfect setup to knock the early bulls out; we would not be surprised if Gold experiences one final move down to the $1000 ranges, before putting in a multi-year bottom.

Mode of action

We are not ready to jump on the Gold bandwagon yet and have maintained this position since we bailed out in 2011. The trend would need to turn positive before we turn bullish on gold and so far the trend based on our trend indicator is neutral. Hence, it would not come as a surprise to us if Gold were to test the $1000 ranges again.

However, we have also stated before if you do not have a position in Gold bullion, then it would make sense to put some money into Gold or silver bullion. Wait for strong pullbacks before committing new funds. Allocating some money does not mean backing the truck up; you allocate a portion of your funds to the metal. We would refrain from jumping into precious metal stocks right now. Astute investors would be wise to pay attention to how Gold stocks hold up when Gold corrects again. The ones that hold up the best will be the one's that lead the way up on the next run.

"An ounce of patience is worth a pound of brains." ~ Dutch Proverb

by Sol Palha

www.tacticalinvestor.com

Sol Palha is a market analyst and educator who uses Mass Psychology, Technical Analysis and Esoteric Cycles to keep you on the right side of the market. He and his partners are on the web at www.tacticalinvestor.com.

© 2016 Copyright Sol Palha- 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