Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21
Why Tether USDT, Stable Scam Coins Could COLLAPSE the Crypto Markets - Black Swan 2021 - 6th Jun 21
Stock Market: 4 Tips for Investing in Gold - 6th Jun 21
Apple (AAPL) Summer Correction Stock Trend Analysis - 5th Jun 21
Stock Market Sentiment Speaks: I 'Believe' We Rally Into A June Swoon - 5th Jun 21
Stock Market Russell 2000 After Reaching A Trend Channel High Flags Out - 5th Jun 21
Money Is Cheap, Own Gold - 5th Jun 21
Bitcoin and Ravencoin Cryptos CRASH Bear Market Buying Levels Price Targets - 4th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Eleven Reasons Why I Am Super Bullish On Gold and Silver.

Commodities / Gold and Silver 2018 Aug 31, 2018 - 10:16 AM GMT

By: Peter_Degraaf

Commodities

                           The Ducks are Lining Up!
This chart is courtesy Real Investment Advice.com and borrowed from a recent article:  ‘Wicksell’s Elegant Model’.   The brown areas in the chart highlight the periods when ‘real rates’ were and are negative.  Gold tends to perform best during those periods.


      


    
Featured is the weekly gold chart courtesy Stockcharts.com.  The pattern indicates the likelihood of a developing ‘inverted head and shoulders’ formation.   Watch for a turnaround here to carve out the right shoulder.  A breakout at the blue arrow will confirm the pattern, with a target at $1650. 


This chart courtesy COT@softwarenorth.com shows the ‘net short’ position of commercial gold dealers has evaporated for the first time in years – perhaps for the first time ever.  As a percentage of open interest the number is very bullish at 0.4%.

/
        
This chart courtesy Zerohedge.com shows hedge funds have NEVER been more ‘net short’ gold.  Hedge funds are often referred to as the 'dumb money'.  The last time these funds were somewhat short (compared to today), was in December 2015 - see chart).  That was when gold moved from $1050 to $1375.  Is history about to repeat?


           
This chart is courtesy Bloomberg.com shows a situation today that compares to a set-up in 2002.  Gold back then rose from $275 to $1925.


This chart courtesy BGMBullion.com shows a steady increase in the amount of gold that is being acquired by Central Banks, since the end of the last financial crisis.  Since Central banks are hoarding gold, we can assume that these bankers anticipate a future role for gold in the world’s financial system. 

This chart dated April 2018, and courtesy IMF and Deutschebank shows several dozen countries and the expected % Change in Government Debt-to-GDP Ratios for “Advanced” Economies.  Most of the countries listed are expected to reduce this ratio, but the USA is shown here as likely to increase its debt to GDP ratio by 9%.  This increase in the level of debt will cause the US dollar to depreciate.  Investors are likely to seek gold and silver for protection.

While this article is focused primarily focused on gold, we recall that historically, during a gold bull market, silver usually moves up even faster than gold.

     
This chart courtesy Sprott.com and sources listed shows hedge funds have shorted silver at an all-time high number.  When too many passengers in a boat are seated on one side, there is danger of the boat tipping over.  Watch what happens to the price of silver when these short positions are covered. 

      
This chart courtesy Egon von Greyerz at Goldswitzerland.com shows a bullish pattern is developing in silver.  Silver is the only commodity that has not yet reached the value that prevailed in February 1980.  An upside breakout here will send silver advancing towards that 48.50 level, and possibly beyond.


This chart courtesy goldchartsrus.com shows the number of ounces backing SLV and other silver ETFs and trusts has increased while the price of silver declined.  This is bullish divergence; leading to the conclusion that silver is due for a rise, to match the uptrend in this chart.


      
Featured is the Palladium chart.  Palladium often leads the precious metals complex.  The upside breakout at the blue arrow is setting a positive example for gold and silver and is confirmed by the supporting indicators. This breakout sets up an initial target at the green arrow.

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