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
Investing in the METAVERSE Stocks Universe - 8th Dec 21
Stock Market Sentiment Speaks: I Expect 15-20% Returns For 2022 - 8th Dec 21
US Dollar Still Has the Green Light - 8th Dec 21
Stock Market Topping Process Roadmap - 8th Dec 21
The Lithium Breakthrough That Could Transform The Mining Industry - 8th Dec 21
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Interesting Development with Gold and Gold Shares

Commodities / Gold & Silver Stocks Mar 20, 2008 - 04:06 AM GMT

By: Brian_Bloom

Commodities Best Financial Markets Analysis ArticleHave a look at the green Relative Strength Charts below. Either the shares need to (soon) start rising relative to gold or the gold price needs to start falling relative to the shares. If the gap in the gold price chart below (at around $850 per ounce) is covered, that will be a very healthy development.


(weekly and monthly, courtesy decisionpoint.com )

Now look at the Relative Strength chart of the 10 yr vs 5 yr bond yield. Has the exponential blow-off peaked?

If so, will short dated yield rise or will long dated yields fall?

Now there's an interesting question!

Have a look at the chart below, in particular at the rising PMO trendline.

If I was a betting man, I would bet that the markets will come down in favour of rising long term yields.

Would this be a sign of inflation expectations, or fear of US Dollar collapse and withdrawal by foreigners of capital?

Can't answer that yet. Dollar looks due for a bounce.

My view is we're heading for a re ali sation that the credit crunch (at least in the USA ) is real. The US Fed can't reasonably expect on the one hand to keep behaving irresponsibly by just ‘printing' money whenever someone (like Bear Sterns) hits a speed wobble and, on the other hand, just expect foreigners to keep providing the funds by subscribing to Treasury Bonds.

I think that's why gold tanked. It was the only way for the Fed to “show” that the markets are still under their control – which, of course, they are not.

I can see the possibility of gold falling to $850 (maybe as low as $750 - $800 in terms of the chart below) in a nice, healthy pullback. I can also see the gold shares stabilising. If/when the gold price starts to rise from $850 THEN the share investors will re ali se that the rise is “real”. THEN the shares will start to seriously outperform the gold price.

Somehow, this scenario feels right. The gold price should really pull back given the high level of the PMO. That would be a healthy development from an international perspective – but would probably signal that the days of hedonism in the USA are over. The US Stock market is not healthy. I stick by my view that the Primary Direction is “down”

Have a look at the weekly chart of the SPX below. The actions of the Fed hardly made a dent in the grand scheme of things. We might have a (temporary) upward reaction, but it doesn't look to me as if the maginot line at around 1380 will be penetrated on the upside. There's time to breath. Time to sell out of industrials and buy into gold shares.

Cheers

By Brian Bloom

www.beyondneanderthal.com

Since 1987, when Brian Bloom became involved in the Venture Capital Industry, he has been constantly on the lookout for alternative energy technologies to replace fossil fuels. He has recently completed the manuscript of a novel entitled Beyond Neanderthal which is targeted to go to the printers within 4-6 weeks.

Interested parties will be emailed with a personal invitation to place their order/s for Beyond Neanderthal – which will be processed and delivered by Austr ali a 's largest independent book distribution group. To avoid disappointment, please register your interest to acquire a copy of the novel at www.beyondneanderthal.com

Copyright © 2008 Brian Bloom - All Rights Reserved

Brian Bloom 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