Gold Editorials & Commentary

GLD - on buy signal.

It has been sixteen months since my last essay and figured this weekend, just before the April Federal Reserve meeting, that the time is ripe to make an appearance especially with gold sector sentiment so bleak and dreary.

I have written (and warned my readers) several times about the weak performance of the HUI index compared to the price of Gold.

The investment world is currently full of paradoxes.

People wonder why gold is not already say $5000 (it certainly could be) right now, given the fact that the US Fed alone and the US treasury have either given directly or bought (or guaranteed) up to $20 trillion USD worth of world bad debt/bonds/CDS/derivatives

Commodities have been sinking like stones since late February, an unusual divergence from the rallying stock markets. This relentless weakness has wreaked havoc on commodities sentiment, leading traders to abandon commodities stocks.

Gold sentiment is currently at super low levels, which would argue that we are at or near a bottom. The current technicals explain a different story as we try to state below.

Weekly GDX

Gold sentiment is currently at super low levels, which would argue that we are at or near a bottom. The current technicals explain a different story as we try to state below.

Weekly GDX

Considering how popular the term "Quantitative Easing", or "QE" for short, has become, it's remarkable that many commentators on the financial markets appear not to understand what QE is.

GLD - new buy signal this week.

Gold has been weathering some considerable selling pressure lately, which has naturally turned sentiment quite pessimistic. Bearish commentary abounds, with all kinds of predictions for further declines.

What an incredibly complex confusing and treacherous month. It can be safely said that 80% of the activity is almost totally kept from the public. The financial system is breaking in an accelerated fashion.

For eighteen months the HUI has been chopping out a sideways trading range that looked like it had the potential to be a huge consolidation pattern.

It was a down week in US markets but many of the leading stocks held up very well or even moved quite a bit higher in a few cases.

GLD - on sell signal.

For well over a decade GATA has been "ranting" about the evils of the Fed and how the world economy is going to collapse in a heap.

Sellers hammered gold again this week on news from the Fed. The minutes from its latest FOMC meeting convinced traders the odds for a third round of quantitative easing are waning.

The big X-factor for the stock market in the coming months will clearly be China.

When reviewing the long-term performance of the gold sector in previous TSI commentaries we looked at performance in nominal dollar terms and in gold terms, but as far as we can recall we never looked at performance relative to the broad stock market.

"The House of Representatives ... can make no law which will not have its full operation on themselves and their friends, as well as the great mass of society.

The past couple months investors have been focusing on the equities market. And rightly so with stocks running higher and higher.

There is no indication on gold's long-term chart that its bullmarket is over, it appears to be simply pausing to consolidate after its sharp rise last year.

GLD - on sell signal.

Around this point in the fractal cycle in the late 70's, Gold busted out of its channel to rise sharply higher, along with Silver. Silver's channel top will lie up around $68 to $70 over the coming months which we believe will be reached in 2012.

A very important objective change has taken place in the gold market. Its price is not moving above the resistance established in the 1600 to 1900 wide berth range. Its price is not moving below support in the same wide permitted range.

In our 19th March commentary, we wrote:

All in all it was a pretty quiet week in the US markets long with precious metals while we saw a huge and swift drop in terms of US bonds this past week which is not something we see everyday but markets seem to be digesting that news rather well.

GLD - on sell signal.

Gold is forming its second bear box since last September. So what does that mean?