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Gold Comments : for 1st Half-2007


drbubb

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SPX-in-gold-ounces

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SPX-in-Euros

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A "Year of Sideways" in Gold stocks (measured in Euros)

sc3dm6.png

- looks similar in Pounds

sc4hu0.png

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Goldcorp (G.t ) : weekly chart

 

waiting to see if the important support at C$25.00 holds

 

= =

 

Slingshot update:

if GDX hangs around here near $39 for another day or so,

a potential trapdoor will open, bringing a fall to GDX-$38 or lower

 

= =

 

Tuesday update:

If the Slingshot is going to work...

chart:

http://chart.bigcharts.com/custom/ft-com/b...=1d&rnd=0.5

 

We are now at a good level ($666) for it to start

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(Mike Swanson is bullish on Gold and Gold stocks):

 

may142007_2.jpg

 

"One thing that has me so bullish about gold stocks is the fact that the 200-day bollinger bands are coming closer together on the XAU than they have been ever since I started to follow gold stocks in 2002. The 200-day bollinger bands measure the long-term volatility of a stock or index and when they come together it means that a trend of long-term consolidation is about to end and a new long-term trend is about to begin. We seen this happen in 2005, 2003, and 2002 in gold stocks and each time it did a huge new uplegs in the gold bull market occurred. The fact that the bollinger bands are more narrow than they were during those times suggests that the next upleg may dwarf the previous ones"

 

- meantime, same indicator suggests a weaker dollar -

 

may142007_3.jpg

 

"While the 200-day bollinger bands are narrowing, the 200-day bollinger bands on the dollar narrowed earlier this year and are now starting to expand again. This suggests that another down leg to the dollar bear market is developing. I see the dollar testing its 80 dollar 30-year support level within the next six weeks - and if that is broken gold stocks will go totally nuts to the upside."

 

-see- http://www.kitco.com/ind/swanson/may142007.html

 

DOLLAR

 

(Here's what David Petch sees for the US Dollar):

 

"The mid-term Elliott Wave chart of the USD index is shown below, with the thought path denoted in green. The USD should retrace the decline to somewhere between 83-83.5 before continuing the descent to the 80.3 level later this year. Wave is taking the form of a flat, with wave C forming a terminal impulse (3-3-3-3-3). There are numerous ways to count waves 1,2 and 3 but for simplicity, I have kept the count only labeled to the Minor Degree (pink). The upward move should continue until mid to late June before declining slowly into October 2007 or later."

 

may112007_4.gif

 

-see- http://www.kitco.com/ind/petch/may112007.html

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(here's the latest comment from the always-bearish-on-Gold EWI people):

 

Here’s another way of looking at the relationship between gold and silver. While silver is making a definitive

break through the trend line under its corrective advance from last summer, gold is hugging its version of the

same support line. STU has previously stated that it will take a slicing of this line by both metals to confirm that

their declines are in acceleration phases. As the all-the-same market rise slowly morphs into all-the-same rout,

this moment is getting tantalizingly close. All it should take to get the snowball rolling is one hard down day or

several listless sideways days in [June Gold]. Once this line is definitively broken, the sell off should pick up

speed. Look for wave 3 to carry the June futures below $574.10, the June 2006 wave (A) low. Eventually, the

decline should carry below $500. A rise above $693.30, the wave ii (circle) high, negates this forecast.

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Volume on this drop (so far) is higher than I would like, but not alarming

 

RATIO : HUI / Gold : $322.94 / $661.20 = 48.84%,

...and this looks like a key level of support for the ratio

 

sp3uz1.png

 

Many signs showing oversold levels, with rally due very soon.

 

Could we reach the nexty key support level of $648-ish for Gold?

 

STILL WAITING to put most of that cash to work

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UPDATED - with cycles

aaimage2po6.gif

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Gold seems to be doing the same thing as last year. Go away in May, DR Bubb tell me it's not so.

 

 

i would not say that.

last year, there was a big spike up, and a huge drop.

we ceratinly havent seen the spike up, and the drop is relatively modest so far.

 

we could see it slide from here, but i reckon too many are expecting that

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i like the way gold stocks are behaving today,

so i am tossing in some small buy orders. things like goldcorp calls,

and some juniors

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i like the way gold stocks are behaving today,

so i am tossing in some small buy orders. things like goldcorp calls,

and some juniors

 

Some follow-thru today...

 

Gold up $5.80

HUI. up $5.86

Goldcorp /GG: 23.73 Change: +0.58

 

...but the volume is too light to say the slingshot action has started

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"If the SPX goes down, gold and silver will go down. The SPX has been very strong lately, while gold and silver have been weaker. The SPX is due a correction and now looks as though it is correcting. What does that mean for gold and silver as people panic and try to liquidate? The ETFs help[ to the upside, no doubt, but they also increase and magnify the downside"

 

NOT NECESSARILY.

 

Gold and Silver have been in a correction since mid-April (when AJ was talking about $1,000 gold). It seems like Gold holders were so unnerved by last years big drop, they began to implement "sell in May" strategies early. So there must be a rather huge amount of cash on the sidelines, wanting to come back into gold at lower prices, and at a later time.

 

If godl surprise people at starts ralling while SPX falls, you may see a sharp jump up. Maybe $100 in 2 weeks from whereever Gold bottoms.

 

Yesterday we saw price destruction on volume. But not alarming volume. If today it goes a little lower on light volume, we may be there (at the lows) in a day or two. If the volume stays high on falls, it will take longer.

 

Let's wait and see

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(A typical mainstream view of gold?):

 

Gold: Breaking Down?

 

12:49:00, May 24, 2007

PRE-20070524.GIF

 

Gold prices appear vulnerable over the near-term from both a technical and fundamental perspective.

 

The price of gold has failed to hold at its recent trend line relative to most G7 currencies, opening the door for a further shakeout in the weeks ahead. A breakdown below the March "double bottom" at $640/ounce would spark a wave of selling. Fundamentally, the precious metal also faces several headwinds. First, the likelihood of a near-term bounce in the dollar bodes poorly for gold. Secondly, many investors view gold as an inflation hedge, yet inflationary pressures are either tame or receding in each of the major countries, as indicated by the decline in breakeven inflation rates across the globe. Finally, we view gold as more of a play on global liquidity conditions rather than inflation. Regardless, aggregate policy rates are rising as many central banks (outside of the U.S.) attempt to cool their housing markets and domestic economies.

 

...more: http://www.bcaresearch.com/

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GOLD GIVING UP ALREADY...

(that is what is sounds like, although they are talking about 'sometime to go' for a correction):

 

Gold rose 600% in the 1970s and then went down nearly every month for two years," remarked Jim Rogers in an interview with Financial News earlier this week.

 

"Most people gave up – but then gold went up another 850%."

 

Fast forward three decades, and the market's giving up on gold yet again. Punters in StreetTracks GLD have shed 6% of their holdings from this time last month – the first ever drawdown since it launched in 2005. Gold futures traders cut their net long positions by 16% last week alone.

 

"That’s what happens in bull markets," shrugs Rogers, author of Adventure Capitalist and co-founder of the Quantum Fund that gained 4,200% during the inflationary '70s.

 

Rogers now foresees a "sizable near-term correction" in gold, adds the New York Sun, after speculators built up a massive leveraged position, far outweighing the shorts held by commercial gold traders and refineries.

 

Why this huge overhang? Short-term hot money craves volatility, and that's just what it gets in gold. The metal has become twice as volatile as US stocks over the last year, says the GFMS consultancy. And taking gold's temperature, the overhang of speculative longs built up in April recorded a fever.

 

Gold now needs the hot money to get squeezed out and move on – and it's being wrung dry in the futures market right now. "The Dollar gold price would seem to have decisively broken down," said John Dizard in the Financial Times early this week, "with a trend that appears sustainable for the next several months, probably at least to the end of this year."

 

Dizard, a long-time gold bull, says the multi-year uptrend will return soon enough, however.

 

"Within a year, the gold bear market will have run its course," he goes on

 

...more: http://news.goldseek.com/GoldSeek/1180108280.php

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"Within a year, the gold bear market will have run its course," he goes on

 

When people are talking about a gold "bear market" it might be time to back up the truck. I've never seen such pessimism. Rydex pm fund flows still at multi-year lows.

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A CRITICAL WEEK FOR GOLD - says Mike Swanson...

 

It has been my contention for the past several months that the XAU and HUI have been preparing to begin a new leg of their bull market. For over a year now, both gold stock indices have been consolidating in a range between their 200-day bollinger bands. We've seen dips and rallies during this time, but all action has been confined to a trading range that has been growing tighter.

 

We've seen two such successive long trading ranges after intermediate-term tops in the past five years. When both of those came to an end, huge returns in gold stocks followed over the six months that followed.

 

Gold stocks ended those trading ranges and began new bull runs once the XAU broke above its 200-day bollinger band after the band had been growing narrow for the previous few months, and once the XAU/gld ratio broke above a downtrend resistance line that had kept it locked down for at least eight months.

 

Now, the 200-day bollinger bands are more narrow then they have been in seven years and the XAU/gld ratio appears to be poised to break above of its downtrend resistance line sometime in the next few weeks..

 

A few weeks ago, I thought we would see the XAU begin to rally above its 200-day bollinger band. That's why I talked about gold bears having two weeks to live. This recent dip in gold stocks has likely just given them another week or two of breathing room. We're about to find out who's right, me or the bears.

 

...more: http://www.kitco.com/ind/swanson/may292007.html

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Long Term Silver Charts - per the Aden Sisters

 

may252007_2.GIF.may252007_1.GIF

Comment:

Interestingly, the leading indicator (B) is still poised to rise and it looks similar to the movements prior to the surging rise leading up to the May 06 peak

 

@: http://www.kitco.com/ind/Aden/may252007.html

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GOLD SHARES could be bottoming here

 

Today's low in GDX may, just may, be important

 

apidyz4.gif

 

Let's see how the volume behaves out of it

 

The GDX-to-SPX ratio could be bottoming also

 

0cht2xy4.png

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Nice move UP yesterday : with GDX over +3% higher !

 

One of the things that I likes best was that HUI moved more than Gold.

Normally, you would expect HUI to move 50% of gold's move.

Yesterday was incredible:

 

HUI : $334.20 +$11.68 / Percent Change: +3.62%

GLD : $ 65.54 +$ 0.82 / Percent Change: +1.27%

Equivalent:.... + $ 8.20

Gold: $666.70 + $5.30

 

Ratio : HUI/Gold: 50.13% // chart: http://tinyurl.com/26445d

 

//move: hui/gld: 1.42 :: hui/gold: 2.20!!!

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GOLD BOTTOM - says Ian Gordon

 

I am writing on behalf of Ian Gordon to follow up on his comments made in the “Seasonal Investing” newsletter sent to all clients and available on www.thelongwaveanalyst.ca. Using W.D. Gann’s cycle work monthly charts will usually show a high or a low occurring in the same month each year. For the HUI the high or low happens in May. Ian feels that the bottom in gold stocks was made on May 30. This has also been confirmed by the monthly charts of Newmont and Goldcorp which have made weekly bottoms. Newmont and Goldcorp make up the largest percentage of the HUI index.

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Yikyak on Advfn brought these charts to everyone's attention on Advfn

 

JS Minesite Traffic ... update :

grapholc1f555555ujsmineqs8.png

 

Kitco Traffic ... update

grapholc1f555555ukitcoxo8.png

 

It is traffic onto two key gold websites.

I think they look very bullish

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