Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Trading THOUGHTS - Gold and Silver Trend is Up, Buy on Corrections

Commodities / Gold & Silver Jun 04, 2007 - 01:09 PM GMT

By: Ned_W_Schmidt


Well, the U.S. reported this past week data on economic performance in the first quarter of 2007. Real growth was 0.6% and the GDP deflator, or inflation, was 3.6%. Speculative fund managers took this as good news, somehow. Inflation during the first quarter was running six times that of inflation. In short, most of what is going on in the U.S. economy has been inflation. Then on Friday came the report on employment in the U.S. Someday the truth will be told on the employment report, but not this week. About 1/3 of the workers added in May were jobs at bars, restaurants, and hotels. Is that economic growth, or laid off construction and factory workers taking any job they can find? 

Basic Trend: $Gold Up. Investors should focus on Buy signals. Strategy: Positive, per Investment Policy of Oct 2004. 

Investment Policy: Act on buy signals. Hold long-term core position.

$Gold had become extremely over sold, and stayed in that condition for several weeks. Now, the U.S. dollar, which had been extremely over bought, does seem to be rolling over. Only real strength in U.S. dollar has been against the Japanese yen and Swiss franc due to carry trade loans. 

The catalyst for the improvement in prices was two news announcements by European central banks on Gold sales. In short, these sales have been less than expected and will be less than expected. That news was appreciated by the market, and improved the attitude of traders. Concerns over European central banks selling Gold have always been too extreme. If they sell Gold, two choices exist. They can spend the money or buy depreciating dollar assets. Neither is an attractive alternative to European leadership.

The intermediate indicator remains generally over sold. That condition suggests that some carry through of rising price into next week. The $690 level will now become the focus of traders.

Basic Trend: $Silver: Up Investors should focus on Buy signals. Strategy: Positive, Per Investment Policy of October 2004 

Investment Policy: Emphasize Buys

Pessimism on Silver had reached an extreme, and stayed high for several weeks. Conditions were put in place, as they were in Gold, for Silver to move higher. Now Silver is at down trend line as drawn in bottom chart. Given that the intermediate indicator remains generally over sold, Silver would still seem to have the fuel for moving above $14.

Big question on both Gold and Silver markets is whether speculative funds have moved enough of their activity out of metals to cease being a problem. Given recent over sold conditions that persisted for some time, a reasonable assumption would be that majority of the negative impact of the speculative funds has been removed. We include a little hope and prayer in that statement.

Recommendations: Hold existing Gold and Silver positions for higher prices, and further profits! Add to positions on buy signals.

CN$Gold: CN$710.2 + 2.2 

Canadian dollar continues on an amazing run, working toward US$0.95 on Friday. What is perhaps most amazing is that a satisfactory reason can not be found for this move. Talk of a rate increase in Canada, but not enough to justify this move. Commodities continue to be strong. Perhaps, that is it. Whatever, Canadian investors should be using this unbelievable high price for Canadian dollar to buy Gold.

Recommendation: Use strength in CN$ and buy signals to add to holdings. CN$ long-term sell.

EU€Gold: €497.7 + 2.2 

EU€Gold has also moved higher from an over sold condition. The intermediate oscillator continues generally over sold so a good chance of moving through €510 does exist. €Gold has put in place two bottoms now in the €490 area so that may encourage further buying.

EU€Gold Recommendation: EU€ investors can hold Gold for long-term. EU€ likely to appreciate against US$. 

GBP £GOLD: £337.9 + 1.6 

GB£ gave a rare intermediate buy signal two weeks ago. That buy is likely to continue to have been timely. GB£Gold has now been stopped twice from falling further at the GB£330 level. A move to GB£350 would seem likely. That action would probably attract further buying. GB£ investors should continue to use all buy signals to move into Gold out of over valued British pounds.

Recommendation: GB£ now in long -term bear market. Add to Gold positions.

GDM: 1034.00, +55.81 or +5.4%:

GDM, the Gold stock index from the Amex, made an abrupt turn on Thursday. The Gold stocks had been over sold for the second time in as many months. The late action last week moved the index through a down trend line as drawn in the graph. Such action is likely to attract further buying. Hold your Gold stocks as we may finally get that move up and through the 1150 resistance level.


Any serious attempt at analyzing the paper asset markets is probably futile at this time. Paper asset markets are being driven by speculative funds using borrowed money to chase stocks. These markets are nothing more than giant speculative margin accounts at this time. The yen is again being crushed by the raising of funds. What will be the catalyst to cause a margin call? Good question, but it will come. 


Food prices continue to show strong uptrend, having advanced by 8% in the past four months. As the chart to right shows, food prices are stronger than even the U.S. equity markets. Demand from China continues strong. Many U.S.-based economists continue to ignore rising food and energy prices, but all of the world may not be so ignorant. Graph is from Agri-Food Value View, June issue of which will be out next week. Drop me a note if you would like to see a copy.

TRADING THOUGHTS is about what the name in implies, is to promote timely and profitable trading of precious metals. We do not believe every turn in the market can be called. Our goal is that our recommendations should be profitable. These goals are not the same. Profits are the goals. Trades are not the goals. Do not expect all recommendations to be profitable. No system can achieve that lofty goal. TRADING THOUGHTS is not intended to be a lengthy news letter filled with witty comments. The goal is simply to state whether conditions in the precious metal's market are favorable or not. Traders are advised that unless they have exceptional experience not to trade against the basic trend. Trading against a market trend is not wise.

Your eternal optimist,

By Ned W Schimdt CFA, CEBS

Copyright © 2007 Ned W. Schmidt - All Rights Reserved

TRADING THOUGHTS is published 45 times per year and distributed by e-mail. An e-mail subscription is $225 per year. Email subscribers to THE VALUE VIEW GOLD REPORT can receive TRADING THOUGHTS as part of a $99 e-mail package subscription to THE VALUE VIEW GOLD REPORT . Fax subscriptions are available for $325 per year.

GOLD THOUGHTS come from Ned W. Schmidt,CFA,CEBS, publisher of The Value View Gold Report , monthly, and Trading Thoughts , weekly. To subscribe to these publications go to This month was the inaugural issue of The Agri-Food Value View , an exploration of how the rise of the Asian economy will benefit agriculture and food investments. To receive a trial subscription, write

© 2005-2019 - 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