GOLD

[happy]

A NEW SERIES of short videos discussing Gold and Gold share Charts is planned

 

These will be carried on the new Green Energy Channel :: ( Link )

 

Here is the first:

 

"Gold Low before end of July... $500 of easy upside"

 

 

Listen to the explanation of the recent Gold vs Debt chart, here:

 

 

Comment:

"Gold Low before the End of July 2014..."

"With $500 of Easy upside."

And that's only if Gold climbs back to the level suggested by outstanding US$ debt. As the debts climb, the upside increases. And if the Gold price moves back to the Top of the Channel, there is $1,000 -1,200 of upside. Or in other words: Gold could rise to $2,300-2,500, perhaps within the next year. Experts like Jim Sinclair and Eric Sprott have predicted gold will hit $2,000 within 2014, so a huge price move may arrive quickly, once the Low is in place."

 

I remember Dominic Frisby posted a version of this chart some time ago (implying a causal link between the US Debt Ceiling and the price of Gold) . . . but really, one should take a step back and look at the bigger picture:

 

 

Looking at this graph, it is clear that the US Debt Ceiling only ever moves in one direction (until it doesn't), but this is irrespective of whether Gold is in a bull or bear market! It does not even exhibit correlation, let alone causation.

 

 

I understand the reasons for owning Gold, and the US public debt is certainly a contributing factor. But to suggest that the level of US Debt has any meaningful relation to the price of Gold, finds no basis in fact. It is a proverbial red herring. To borrow a line from Gary Tanashian: "Gold is about value, not price."

 

The question of whether there ought to be a relation between US public debt and the price of Gold, is a completely different matter.

[Traineeinvestor]

Those are important charts (and a very good question).

 

A couple of comments on the charts:

 

Comparing a dollar of debt in 1940 with a dollar of debt in 2012 is not meaningful. They would be more useful if they were either in log scale or inflation adjusted and compared to total GDP and had the present value of unfunded commitments added to the national debt. Debt + present value of unfunded liabilities against per capital income would also be a useful chart. Even with these adjustment, it would still be an ugly picture of a country that is hell bent on bankrupting itself through political means.

 

I agree with you that there is no rational basis for linking to price of gold to the level of US debt. There is a marginal argument for linking the price of gold to the money supply but it is a very very weak one.

[happy]

I agree with you that there is no rational basis for linking to price of gold to the level of US debt. There is a marginal argument for linking the price of gold to the money supply but it is a very very weak one.

 

Perhaps ... but then one would need to take into account other asset classes as well, very quickly complicating the picture.

[drbubb]

Very good, Happy.

Thanks for the longer term charts.

I do agree that outside the period of 2000-2014, the relationship of Gold-to-Debt may have shifted.

So it is good to see more data on a chart.

 

Having said that, I don't think the chart goes back far enough:

- so I have added a Gold price section derived from THIS CHART,

- and here's what I got:

 

 

Your chart started in Jan. 1980, just as the Gold price was peaking. So if you take the data back further, you will see that Gold prices and debt levels converge sometime (again?) sometime in the early 1970's. And Gold might even be BELOW the debt levels, when Gold was priced at $35-41 per ounce.

 

I will comment on this further when I have more time, but I certainly think the relationship between these two things is valid, mainly because the amount of Govt Debt in the economy is also a measure of how much money, and how much spending power is in the economy. Do not forget: in a debt based monetary system: One man's dollar debts, are another man's dollar wealth; and if there is more wealth extent, it will likely inspire more spending, and eventually higher Gold prices.

 

I do appreciate the charts and the discussion here

[happy]

Very good, Happy.

Thanks for the longer term charts.

I do agree that outside the period of 2000-2014, the relationship of Gold-to-Debt may have shifted.

So it is good to see more data on a chart.

 

Having said that, I don't think the chart goes back far enough:

- so I have added a Gold price section derived from THIS CHART,

- and here's what I got:

 

 

Your chart started in Jan. 1980, just as the Gold price was peaking. So if you take the data back further, you will see that Gold prices and debt levels converge sometime (again?) sometime in the early 1970's. And Gold might even be BELOW the debt levels, when Gold was priced at $35-41 per ounce.

 

I will comment on this further when I have more time, but I certainly think the relationship between these two things is valid, mainly because the amount of Govt Debt in the economy is also a measure of how much money, and how much spending power is in the economy. Do not forget: in a debt based monetary system: One man's dollar debts, are another man's dollar wealth; and if there is more wealth extent, it will likely inspire more spending, and eventually higher Gold prices.

 

I do appreciate the charts and the discussion here

 

I don't doubt that the "debt issue" impacts on the price of Gold . . . at times.

 

The problem is that market psychology, like so many other things, moves in waves. Your call for a significant low in Gold may prove prescient, and yes, perhaps this coincides with a corresponding high in complacency regarding the debt issue. If and when the debt issue again becomes a focus, then perhaps Gold will be a beneficiary.

 

But this is quite a separate argument from saying that the level of debt directly impacts on the price of gold, or exhibits any meaningful correlation.

[Traineeinvestor]

 

Perhaps ... but then one would need to take into account other asset classes as well, very quickly complicating the picture.

 

Exactly - which is one of the reasons why i said the argument was a ver very weak one.

[carbon junkie]

Morning all new forecast posted. But I thought I might just post it here as well. Still bearish for the next few weeks.

 

[drbubb]

Carbon Junkie, psst ! How about an avatar?

 

> see suggestions: http://www.greenenergyinvestors.com/index.php?showtopic=19060

 

== ==

 

In edit:

Saw yours. Good choice !

[Traineeinvestor]

India to relax gold import restrictions: http://www.bloomberg.com/news/2014-05-22/gold-imports-by-india-seen-climbing-as-rbi-relaxes-some-curbs.html

 

This may not be as exciting as it sounds. The expected increase is from 10 to 15 tonnes per month for as long as the relaxation remains in effect. There will probably be some substitution of legally imported gold for smuggled gold - although how much is a complete guess.

 

But gold is ultimately about sentiment rather than fundamentals. Given India's traditional appetite for gold and the international recognition of that appetite, the question is whether this is enough to reignite sentiment for the yellow metal?

[carbon junkie]

Hi all another forecast posted still bearish, end of week end of month should be interesting.

[drbubb]

If you look at Gold-in-Euros,

the upper end of the Triangle is being tested now

 

 

GLD (in US$) is closer to the Bottom of the Triangle : GLD-6mos

[Perishabull]

[carbon junkie]

So the end of the month was interesting. Better to be too early than a day late. New forecast below.

[Erewhon888]

 

 

 

https://www.youtube.com/watch?v=fKviBNo76iI

 

Stephanie Pomboy's chart from the linked presentation. I added the arrrows to highlight her point about inverse correlation after QE3 contrasting with positive correlation before.

[drbubb]

Yes, thanks.

the Gold vs Fed Debt chart makes the same point as this Video:

 

 

"A Major Low by July"

"$500-600 of Eayy upside"

[Erewhon888]

Thanks. I heard you mention you associate QE with the debt in your comments on the chart in your video.

 

Are there any other points of agreement or disagreement with Stephanie Pomboy's views?

[drbubb]

I was focused on the chart - not the presentation -

I later listened to it, and made some notes:

 

Notes from Stephanie Pomboy - On WHY BERNANKE LEFT:

"The entire recovery has been a result of inflation." - she says
She SHOWS but does not say:
The entire wealth effect, has been a rise in wealth of stock holders (the 1%), who are not spending it.
Also:
+ "There was a 'cash-out refinancing boom' of $350 billion
+ "Everyday they continued QE, they chased away more and more foreign creditors"

 

 

+ "from the day they launched QE3 - the relationship of Gold-to-Fed Balance sheet reversed.

+ "I think they will eventually have to reverse tapering, and return to QE, so as not to kill the economy."

[happy]

latest from Martin Armstrong:

 

 

Ecuador, Goldman & Gold

 

Ecuador hands Goldman Sachs 466,000 ounces of gold worth roughly $580 million at today’s ruling price. Ecuador under its socialist President Rafael Correa is seeking sources of cash after they borrowed over $11 billion from China because they defaulted on $3.2 billion of foreign debt five years ago. This is the consequence of debt and in the hands of socialists-communists, the bonds ultimately are always defaulted upon.

 

Like Zimbabwe, who had to adopt foreign currency because people will not trust their own, Ecuador is the only country in South America that is using the US dollar as currency. Ecuador did not sell its gold, it effectively borrowed against it in exchange for more liquid assets. Ecuador expects to turn a profit of as much as $20 million on the transaction and it will get the gold back within three years and the central bank expects to turn a profit of as much as $20 million on the transaction without explaining how.

 

It appears that Goldman will most likely sell the gold forward helping to break the back of gold and will most likely look to replace it at the lows under $1,000.

 

[drbubb]

Hmm.

 

I wonder if Goldman engineer Gold's drop out of the Triangle?

[carbon junkie]

[drbubb]

Thanks Carbon Junkie

 

I wonder how your Forecasts will compare with the One Week views in the Kitco Surveys?

=

 

A CONTRARIAN Indicator?

 

 

I note that these Guys were Bearish last week, and Gold rose a bit:

 

== Last WEEK's MOVES ==== : on Friday 06/06 alone = :
GLD : 120.43 : + 0.15 % / 120.61 : -0.05 : -0.04% / 4.77 M
GDX : $22.50 : + 0.62 % > $22.64 : -0.01 : -0.04% / 15.95 M
Ratio : 5.352 : - 0.46 % / R 5.327 (GLDx10.384 = $1,252.4)
Gdxj : $34.11 : + 2.35 % / $34.91 : +0.52 : +1.51% : 3.24 M

===========

 

Maybe I should start tracking the Kitco Poll

 

Survey Participants Stay Bearish Toward Gold Prices - Kitco News, Jun 6 2014 12:19PM

 

Results : -5 : 63.1% of Views = +7, -12, N3 = 22 /33 : $1252.4> ???

 

Participants in the weekly Kitco News Gold Survey are bearish on gold prices for next week, looking for a retest of recent lows.

Out of 33 participants, 22 responded this week. Of those, 12 see prices lower, seven see prices higher and three see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, survey participants were slightly bearish for this week. As of 11:30 a.m. EDT, Comex Augustgold was up about $5 for the week.

Those who see weaker prices said the downtrend in gold continues despite a rally Thursday, following the European Central Bank meeting.

“I think we’re going to go back down. We had a little bit of a retracement here, a bounce off support. But I don’t see it holding. I think we go back to test support. The downtrend continues,” said Daniel Pavilonis, senior commodities broker with RJO Futures.

Participants who look for higher prices said gold values in the short-term became oversold and the market is due for a bounce.

President Barack “Obama’s rhetoric against Russia is heating up again, even as the violence in Ukraine is getting worse. That’s obviously positive for gold. And the ECB’s tepid stimulative measures are also positive since they demonstrate the lack of resolve on the part of the ECB; so far, it’s been all talk and very little action. These two developments against a gold price that had become short-term oversold, suggests a positive week or two,” said Adrian Day, chairman and chief executive officer of Adrian Day Asset Management.

Those who see prices holding sideways said with the two major news events out of the way, the ECB meeting and the May nonfarm payrolls report, there’s little to stir the market.

“Gold is suffering from a lack of interest as most speculators look elsewhere for trading opportunities,” said Frank Lesh, broker and futures analyst with FuturePath Trading. “Physical demand isn’t that strong right now either. Traders were set up short gold and the euro for the ECB meeting and when the announcement of policy came out they all covered, so now gold just hangs around in a range. This market is oversold and could rebound at any time, or maybe it just continues sideways to relieve the overbought status

==

> http://www.kitco.com/news/2014-06-06/Survey-Participants-Stay-Bearish-Toward-Gold-Prices.html

Historical Survey DATA:

==== : Net : %Views= Up: Dn: N = Surveyed: FriGold > NextWk: Chg.

05/02 : unkn: 0?.0% = +0?, - 0?, N ? = 2? /33 : $1300.6 > 1289.4 : - 0.86%

05/09 : unkn: 0?.0% = +0?, - 0?, N ? = 2? /33 : $1289.4 > 1292.5 : +0.24%

05/16 : unkn: 0?.0% = +0?, - 0?, N ? = 2? /33 : $1292.5 > 1293.0 : +0.04%

05/23 : Bull. : 0?.0% = +0?, - 0?, N ? = 2? /33 : $1293.0 > 1250.5 : - 3.29%

05/30 : - 11 : 00.0% = +07, - 18, N 2 = 27 /33 : $1250.5 > 1252.4 : +1.52%

06/06 : - 05 : 63.1% = +07, - 12, N 3 = 22 /33 : $1252.4 > ????

 

=

[drbubb]

WE HAVE IGNITION ! (a completed "head fake")

 

 

The Head Fake for GDX* was completed yesterday,

when GDX closed above the downwards gap (at $23.00-23.35)

 

GDX / Gold Miners etf... GDX-chart : GDXJ : NUGT : GLD-is-lagging

 

 

Note that GDXJ and GDX often LEAD Gold, as I explain here:

 

 

Updating changes from yesterday:

 

GDX - : $23.41 +0.38 +1.65% : 25.59 mn

GDXJ : $37.46 +1.08 +2.97% : 5.02 mn

NUGT : $32.57 +1.46 +4.69% : 3.32mn

ASA - : $13.28 +0.18 +1.37% : 48,727
IAG -- : $ 3.90 + 0.13 +3.45% : 8.18mn
VGZ - : $0.445 +.052 +13.09% : 408,608

=====

[carbon junkie]

Nice bounce last week but still bearish at this stage.

 

[JIMBOWEN27]

WallStreet concerned over China's gold hoarding

HTTP://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1203&MainCatID=12&id=20140602000001

[JIMBOWEN27]

A Golden Lift-Off Approaches
Market Vectors Junior Gold Miners (ARCA:GDXJ) just took out the 200 day moving average on its second highest volume ever, and record volume in GDXJ was just last week. This is big time accumulation going on. Furthermore checkout mining stocks like MAG Silver Corp. (AMEX:MVG), Agnico Eagle Mines Limited (NYSE:AEM), Sandstorm Gold (ARCA:SAND) to name a few. As soon as gold completed the failed breakdown they have gone on a moonshot. This is something that few are talking about because everybody is so beat up and tired of the bear market in gold. But this is exactly the type of behavior that launches a new bull market, big volume and explosive price moves.

 

HTTP://www.investing.com/analysis/a-golden-lift-off-approaches-216631