Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

Is the Gold Bull Back?

Commodities / Gold and Silver 2018 Nov 05, 2018 - 05:09 PM GMT

By: Peter_Degraaf

Commodities

The Price of Gold appears to have bottomed, after declining since 2011. Here is a look at the weekly trend.



Gold has carved out an ABC bottom, (C above A followed by a rise above B). The breakout at the blue arrow overcame six months of resistance. Price is now tackling the 200 week moving average at the green arrow.


This chart courtesy Bloomberg.com shows the number of short positions in gold futures recently reached an all-time high. From a contrarian viewpoint this is bullish, because these positions will have to be covered – sooner or later.

From a fundamental point of view, gold is overdue to perform as it did between 2002 and 2011. One reason for that is the enormous US budget deficit. This deficit will not be paid off - it will be inflated away.



Chart courtesy GATA.org. There are two possible solutions to the wide spread between the US National Debt and the price of gold. Either the debt gets paid off, or gold will rise. The most likely solution is the latter. The longtime relationship between gold and the deficit is obvious.

A number of central banks are adding gold to their reserves. Russia purchased 1.2 million ounces in September. China, India and Hungary among others, are adding gold to their reserves.


Chart courtesy goldchartsrus.com


Chart courtesy Smauld.com


This chart is courtesy Goldchartsrus.com. and it shows the amount of gold that is delivered to the Shanghai Gold Exchange each week. This is in addition to the gold that comes in via Hong Kong.

These three charts show a growing appetite for gold in the East, where the historical importance of gold ownership is well understood.


This chart courtesy Goldswitzerland.com shows a breakout that will persuade a lot Chinese investors to buy gold.

This chart is also courtesy Goldswitzerland.com. It shows the likelihood that the Dow-Gold ratio will turn down. In 1980 the value of 1 ounce of gold was equal to the value of the value of the DOW. Today it takes 20 ounces. Selling Dow stocks and buying gold is beginning to look attractive.

Next is a chart that compares gold mining stocks (GDX) to the S&P 500 index.



Since September the trend has been moving in favor of gold miners. The supporting indicators are positive and the 50DMA is turning upward.


This chart is courtesy COT@softwarenorth.com, and it shows commercial gold traders are ‘net short’ by just 47,000 contracts. As a percentage of open interest the number is bullish at 10%.


This chart courtesy Dollarcollapse.com, and it shows an upside breakout by the JSE gold miners index.


Featured is the Palladium chart. Price often leads gold and silver to the upside. The breakout above the 200 day moving average at the blue arrow has been confirmed and is ongoing. The moving averages are in positive alignment and rising.

DISCLAIMER:  Please do your own due diligence.  Peter Degraaf is NOT responsible for your trading decisions.

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.

© 2018 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