Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
US Overdosing on Debt - 19th Mar 19 -
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

Gold at $1125 Per Ounce Now

Commodities / Gold & Silver Sep 30, 2008 - 08:16 AM GMT

By: Neil_Charnock

Commodities

That is not a miss-quote it is the price of gold in Aussie dollars as I turn on my computer this morning. The worst of our fears have emerged for the financial system and it is too late for blame and I see no point in that anyway. It is not a constructive state of mind and more than ever people need to be constructive in this climate.

I managed to rescue my own father from the crisis only very recently – he refused to listen to me in years past but he did ask me to talk to his “Financial Advisor” to see if Charlie thought my thesis about gold and silver had merit. That was about 4 – 5 years ago. I will put Charlie's reply politely – “time is money and you are wasting mine so go away and stop bothering me”.


I do not hold the whole profession responsible but it is interesting - I have come up with a correct term for the Profession of "Financial Advisor" and it is not really Charlie's fault in a sense.  It is a factor of his education and the role of the profession is to place people's assets in mainstream structured financial vehicles. 

Anyway my more correct term for that profession is: "Super Annuation & Tax Educated Capital Collection & Fee Based Cash Dispersal Agents". I will put my analysis on this politely – they have no actual analysis to fall back on beyond their own meager understanding of the true nature of economic cycles and money.  Instead they rely on general knowledge of investment vehicles and as I said; Super & Tax law. In good times this worked however that party was long over before that profession had any clue.

Sadly I had to say to my father that I had watched his losses grow to a point where he would be ready to listen to me at long last and he did. Charlie watched my father withdraw what is left of his capital in horror stating that it was crystal ball stuff and that he recommended my father not to take this course of action.

Was it really crystal ball analysis? I don't think so and had told my father (structural engineer) that if he saw a bridge being constructed that was vastly under engineered – sub standard construction – then he would “predict” disaster at some point.

Why do I point this rather personal situation out here? Because I bet most of the readers of this article have tried to tell friends, family and associates about the impending crisis to no avail. Why do we bother? Because we care that people are going to suffer more than they are aware – they assigned their own financial well being to others and it was like assigning the job of Sheppard to a pack of wolves. We instinctively want a pleasant society to live in and the building blocks of the society are the people so we try to assist those around us.

Like my father perhaps it is not too late – you can now try to talk to people again and they may have suffered enough pain to listen at long last. Once they have had their “financial reality” shattered they will be off balance and upset which is a great shame however at least they may now listen.

Gold Equities Comment

OK now to basic summary – the action on the gold stocks Down Under is in a base formation in my humble opinion. Large and emerging producers jumped back from recent lows and even the better juniors showed signs of life. My index charts at GoldOz show reversal patterns and several gold stocks have pronounced buy signals now.

I saw these stocks bottoming through September to November and have stated so for the past few months. I have not changed my mind at this stage however I do watch with caution as we all must – after all we do not decide what the market will do we must follow what it does. But one must hold a view and work to a plan with a clear exit strategy in case we are wrong.

I have been watching the depth and buying / selling action of gold stocks on these big down days. The action is heavily influenced by the big funds and their program based selling as they get their lead from the offshore markets – namely the USA . A big slap down just as their computer tells them first thing in the morning and then I watch the quality sectors get swamped at lower levels like sea gulls fighting over potato chips at the beach.

The bids are withdrawn before the open and down it all goes on the bell and for a short time afterwards. Then once base panic driven selling is reached the scraps at these lower levels are up for grabs and the squabble begins – quietly of course after the initial grab. Then as the bargain hunters wait in the depth I watch the bid slowly regain higher levels. There is some strength under many of these gold stocks and plenty under my preferred UCG play.

The complete disconnect between equities and gold stocks have not happened as yet even though I do see the correlation beginning to weaken. Many Australian gold producers are and have been receiving AUD$1000 per ounce for many months and are doing well despite cost pressures.

The diversified stocks are being hit as speculators appear to be driving copper, nickel, zinc and lead to false lows. If these prices were to continue their production would grind to a halt. Many projects are being shelved due to liquidity constraints already and the lower margin mines would soon close. I have seen reports of cuts to production already and this will increase sharply without higher metal commodity prices.

Gold production is falling and existing supply, which has far more influence on price, is likely to dry up considerably as investors and Central Banks hold on tight. Germany has announced that it will not sell.

Soon the hedge funds and big investors will be looking for opportunity to make money and make back losses and I believe it will be gold and gold stocks plus emerging energy technologies, energy, food and fertilizers. Inflation is coming your way and things will be volatile as the derivatives are gradually unwound. These derivatives positions are so large that wild swings will occur providing savvy investors with the chance to have some fun.

Last comment today is that the old saying about when the US sneezes the rest of the world catches cold appears to be changing. The USA was hammered last night and yet falls are comparatively moderate here today. You might say the US has caught the flu (or is that pneumonia) and we all caught cold. The cold is serious however we are not as sick and the poor old USA . The USA is proud and resourceful and we all wish you well for a speedy recovery… we live in hope.

We may live in hope but we should invest in reality and to this end I have negotiated a way to provide specific stock recommendations shortly – with independent guidance on price levels. Protect yourself today and get some education on finance and buy some precious metals – this is not over yet and the fun for gold investors is all ahead of us still.

Good trading / investing.
Regards,
Neil Charnock

www.goldoz.com.au

GoldOz is currently developing a Member area and has added further resources for free access. We have stepped up our research and stand by to assist investors from all walks of life. We sell an updating PDF service on ASX gold stocks from only $AUD35 for 3 months – the feedback is grateful and enthusiastic because we are highlighting companies that have growth potential and offering professional coverage of the sector. GoldOz web site is a growing dynamic resource for investors interested in PGE, silver and gold companies listed in Australia , brokers, bullion dealers and other services.

Neil Charnock is not a registered investment advisor. He is a private investor who, in addition to his essay publication offerings, has now assembled a highly experienced panel to assist in the presentation of various research information services.  The opinions and statements made in the above publication are the result of extensive research and are believed to be accurate and from reliable sources. The contents are his current opinion only, further more conditions may cause these opinions to change without notice. The insights herein published are made solely for international and educational purposes. The contents in this publication are not to be construed as solicitation or recommendation to be used for formulation of investment decisions in any type of market whatsoever. WARNING share market investment or speculation is a high risk activity. Investors enter such activity at their own risk and must conduct their own due diligence to research and verify all aspects of any investment decision, if necessary seeking competent professional assistance.

Neil Charnock 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