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Gold Bug's Index (HUI) & Amex Gold stocks (GDX)

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Despite the recent fall in Gold below $600, the Gold share indices do not look too bad

 

Weekly HUI ... update : daily // weekly XAU -- Gold and GLD : GLD daily

biguo6.gif

 

In fact, after the dip, this chart looks as if HUI may be due for a sharp rally,

assuming it can hold the 52week/ 252d Moving Average.

The Weekly XAU chart shows support a bit lower, at xau-120.

For HUI, a drop to the lower Bolly band, near hui-288, would not be a damaging thing, so long as the price action quickly gets back above the 252d MA.

 

Shorter term, I like to focus on GDX, the Amex Gold stock index, because there are volume figures.

The problem with the GDX data is that it has been available for only a short time- since late May 2006.

History shows that it tracks HUI extremely well ... update

 

But we only have the volume indication for 3 1/2 months... update

bigfc6.gif

 

The GDX volume was heavy the day Gold fell through $600. This is not surprising, given the historic importance of this key level. But this momentum can be mended if it is quickly reversed (as it was on the last low in June) or if lower lows are made on light volume, and that looks as if that is what the market is trying to do.

 

= = = = =

LINKS:

Frank P's thread: http://www.investorshub.com/boards/board.asp?board_id=1430

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ThiNKING About Manipulation...

 

This stock rally has been fueled by weak oil and commodities.

But notice that the Japanese market has been weak.

What is this saying? In Japan, they are thinking that the emerging slowdown is more important,

that the commodity price move, - and perhaps they see the oil price dip as temporary.

Is it crazy to think that the oil price being manipulated to give a pre-election boost to the US stock market?

 

If so, how long can they keep the manipultion going?

 

1/

This huge discovery (Jack2), which may add xx% to US oil reserves sounds great,

but it is 7,000 feet deep, and it is going to take years and loads of money to bring the oil up.

One commentor (Zapata George) said it would need $150 oil to make it economic.

So how long lasting is the impact going to be? The news may get the oil price down

before an election, but at some stage, reality will set in.

 

2/

Here's an excerpt from a conversation i had today with a friend about manipulation

 

DB says: i feel a whole lot better after seeing this hui chart

DB says: lets assume there is some manipulation going on in oil and gold

XX says: it helped a LOT with copper up today ((CU closed higher after being down 1%))

DB says: how long can they keep it up, the manipulation of gold?

DB says: even great promoters can keep their promotions going a limited time

DB says: correct

DB says: i get the sense that copper may be less manipulated than gold

XX says: less of it around

DB says: and less attention from the fed

DB says: also, gold stocks are less manipulated, which is why they can give advance notice of moves in gold

XX says: same with nickel and silver

DB says: nickel, yes. but silver could be manipulated rather easily, when they bother

 

3/

Looking at the past.

The June selloff in Gold was quickly reversed... update : 10d-charts: GLD v. : GDX v.

bigal4.gif

 

This time the selloff in GLD- the gold etf- has been moderate, which suggests it could be more easily reversed. A near-term rally in Gold shares may be the first sign that this reversal has started

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Whilst people are talking about manipulation, there doesn't seem to be much transparency re the US gold reserves and sales. Seems there is uncertainty about what is defined as gold reserve in US anyway.

Looking at the World Gold Council website, I can find recent info on European gold sales, but little on US, nor can I find much that makes sense on the US fed websites re gold reserves and sales.

 

All I can find are comments which could be dismissed as conspiracy, but still worth a read.

for 2005

Gold Anti-trust Action Committee

A Look at Central Bank Gold Reserves and other articles

http://www.gata.org/node/104

 

and this year

http://www.fnarena.com/index2.cfm?type=dsp...5A89CE1B0211129

http://www.fnarena.com/index2.cfm?type=dsp...545B093901EA19E

http://www.fnarena.com/index2.cfm?type=dsp...513840A1C53476C

 

Apologies as no doubt it's old hat to a lot of people, but still I find it interesting.

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[q

Is carzy to think that the oil price being manipulated to give a pre-election boost to the US stock market?

 

If so, how long can they keep the manipultion going?

 

 

Trouble is the elections aren't until November, so an attempt to force down gold and oil seems a bit early.

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Trouble is the elections aren't until November, so an attempt to force down gold and oil seems a bit early.

 

 

Not really. You need a while for the feel good factor to kick in.

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early?

not at all. as Pluto says, the feel-good factor needs time.

 

I have often wondered why gold shares tend to lead gold.

A simple explantion may surfice. Unmanipulated, gold shares move before gold do.

 

This would explain moves we have seen before, with HUI and XAU moving up before gold

moves off its bottom.

 

It may sound crazy to some, but the existence of the Plunge protection team, is now a

proven fact. if they prop up the dollar, why not manipulate gold and stocks too?

 

= =

 

WATCHING for a JUMP in gold shares, may prove a good way to spot quickly

the upturn in gold.

 

watch the comparative 10d-charts: GLD v. : GDX v.

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Gold looks really weak here. If she tests 550 it could go back to 500.

 

I think the Fed wants to go on pause again - or even a cut - to bail out all the ARM buyers. Commodoties are taking in on the chin because of it.

 

Note: the GBP and EURO are gaining ground against the USD. It is a shame the FED can't get their boys (PPT) on their case as well.

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buying some gold shs and oil shs here

nsu and cop, + orders on others

 

as i said earlier, we could see at least a minor low today or tomorrow on gold shares,

and maybe oil shares too

 

gold close enough to my $560 target to buy some gold shares

 

apic1kv5.png

 

bounce from trendline possible. could be helped by inflation data, if higher than expectations

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Guest Guest
Whilst people are talking about manipulation, there doesn't seem to be much transparency re the US gold reserves and sales. Seems there is uncertainty about what is defined as gold reserve in US anyway.

Looking at the World Gold Council website, I can find recent info on European gold sales, but little on US, nor can I find much that makes sense on the US fed websites re gold reserves and sales.

 

All I can find are comments which could be dismissed as conspiracy, but still worth a read.

for 2005

Gold Anti-trust Action Committee

A Look at Central Bank Gold Reserves and other articles

http://www.gata.org/node/104

 

and this year

http://www.fnarena.com/index2.cfm?type=dsp...5A89CE1B0211129

http://www.fnarena.com/index2.cfm?type=dsp...545B093901EA19E

http://www.fnarena.com/index2.cfm?type=dsp...513840A1C53476C

 

Apologies as no doubt it's old hat to a lot of people, but still I find it interesting.

 

Excellent links.. they were great reads for a starter like me.. I always thought the stock market was off limits to me.. but gold seems a really good option.

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I HOPE these postings on the Monthly comments thread added up to a clear call of the low at/near $560:

 

1/ - #323

that small distance to silver's 252dma, could coincide with the $10 or so down to gold-$560

 

2/ - #343

the most interesting action today is in the gold shares,

which may be showing the early stage of a reversal upwards

 

3/ above

Said I was buying Gold and Oil shares

 

4/ - #352

If we get this rally, it may not last long. Maybe three weeks into early October

gold/hui are not oversold enough for a really important low. we could see a renewed fall into christmas

 

5/ - #358

"Have you given up on gold then?"

 

NOT at all.

I am buying gold shares aggressively now, and positioning myself for a good rally:

Maybe $50-100 in 3 weeks is possible. Maybe more. I will let the action tell me, if it comes.

 

Still, I will be alreat to a profit-taking opportunity. And I think tehre is a decent chance we could see another low in late Dec/ early Jan. Will be below $600, or below $550? I have no idea.

 

Oil stocks might be a better buy here on an interim basis. But both beat the general indices IMHO

 

((I am amazed that anyone would think that I was "giving up on gold" after so many signals,

that I exepcted a smart rally from $560 or so.)

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Guest Guest_indium_*
((I am amazed that anyone would think that I was "giving up on gold" after so many signals,

that I exepcted a smart rally from $560 or so.)

 

Sorry, it's just a lot of the content on gold right now is very bearish. I cannot read which way it may go. There are a lot of good arguments for both ways....

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Sorry, it's just a lot of the content on gold right now is very bearish. I cannot read which way it may go. There are a lot of good arguments for both ways....

 

there usually are.

 

I think you'll find though very few people are long term bearish on gold

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I think you'll find though very few people are long term bearish on gold

 

Erm....Exactly?

 

As much as I'd like to see the Midas metal move up, could it be we are feeling "irrational exhuberance" about the shiny stuff?

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Erm....Exactly?

 

As much as I'd like to see the Midas metal move up, could it be we are feeling "irrational exhuberance" about the shiny stuff?

 

Of course. Contrarian investing is never THAT simple though...

 

I definitely think 'irrational exhuberance' is where we are in the short term.

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Of course. Contrarian investing is never THAT simple though...

 

I definitely think 'irrational exhuberance' is where we are in the short term.

 

 

it is always easiest (emotionally) to buy at a top, when everyone is bullish.

 

buying the dips when the sentiment has swung to bearish- like now- is hard,

but that is how you make money. but the charts must be right, and the volume set-up too.

we had a perfect example last friday

 

i bought shares of nevsun, and some of those on my watchlist.

plus calls on : asa, gfi, and hmy, and am already up about 35% on the calls in 1 1/2 trading days

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GOLD was dragged down by the $2.00+ fall in Crude.

 

But there is a message in yesterday's Oil Sector index (XLE)

 

chart: crude/USO vs. XLE

 

XLE made a triple bottom yesterday, and lifted off it's lows.

 

message: crude is trying to bottom here...

and that would help gold shares, many of which are still above last week's lows

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A Normal Correction... current leg 6 is like leg 4:

 

5942_b.gif

 

Interestingly this past summer's high consolidation mirrors, almost perfectly over the month or so prior to the HUI's early September highs, the high consolidation of massive upleg 4, the red one. Back in early 2004 correction 4 started out rather slowly and just grinded sideways, convincing many people including me unfortunately that the worst was behind us. Then at the very end of this correction it fell off a cliff and shredded anyone who bought in too early. Correction 4 really hurt a lot, believe me!

 

Now today correction 6 is mirroring correction 4 incredibly well. The HUI hit 365 and created its last hurrah of false hope on the 81st trading day of our current correction. Back in correction 4, the HUI's last minor high was achieved on the 83rd day. And then after that the bottoms fell out of both corrections and they started plummeting. While I don't know if this uncanny symmetry will continue, I'd be hesitant to bet against it.

 

...more: http://www.safehaven.com/article-5942.htm

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It looks as though massive uplegs only occur every two years so the next rally is due to be a consolidation rally which may see gold drop back around current levels $600 next Summer before a big rally late next Year. This suggest that this consolidation rally may be better traded looking to buy gold stocks when the HUI hits 255 in the next few weeks then attempting to sell at the peak around April.

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Is there any ETF or fund that tracks any of the gold indicies. The only one I can make out is GDM, the American Gold miners index.

 

In other words, is there an easy way to invest in a basked of gold shares?

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Yeah, I was a bit dumb. GDX is the ETF tracking the GDM. There are also options on it.

 

Constituents:

 

As of September 22, 2006

 

Barrick Gold Corp. ABX 15.44

Newmont Mining Corp. NEM 11.26

AngloGold Ashanti Ltd. AU 6.43

Freeport-McMoRan Copper & Gold Inc. FCX 5.81

Goldcorp Inc. GG 5.77

Gold Fields Ltd. GFI 5.40

Harmony Gold Mining Co. Ltd. HMY 4.76

Glamis Gold Ltd. GLG 4.44

Kinross Gold Corp. KGC 4.29

Agnico-Eagle Mines Ltd. AEM 3.78

Compania de Minas Buenaventura S.A. BVN 3.62

Yamana Gold Inc. AUY 2.77

Meridian Gold Inc. MDG 2.53

Bema Gold Corp. BGO 2.19

IAMGOLD Corp. IAG 1.57

Eldorado Gold Corp. EGO 1.48

Pan American Silver Corp. PAAS 1.48

NovaGold Resources Inc. NG 1.44

Randgold Resources Ltd. GOLD 1.41

Silver Standard Resources Inc. SSRI 1.34

Coeur d'Alene Mines Corp. CDE 1.32

Cambior Inc. CBJ 1.02

Gammon Lake Resources Inc. GRS 0.97

Apex Silver Mines Ltd. SIL 0.90

Miramar Mining Corp. MNG 0.79

Royal Gold Inc. RGLD 0.66

Crystallex International Corp. KRY 0.66

Northgate Minerals Corp. NXG 0.65

Hecla Mining Co. HL 0.65

Northern Orion Resources Inc. NTO 0.59

Golden Star Resources Ltd. GSS 0.57

Tanzanian Royalty Exploration Corp. TRE 0.46

Minefinders Corp. Ltd. MFN 0.45

Seabridge Gold Inc. SA 0.41

Aurizon Mines Ltd. AZK 0.37

Rio Narcea Gold Mines Ltd. RNO 0.36

Cumberland Resources Ltd. CLG 0.32

Nevsun Resources Ltd. NSU 0.32

Vista Gold Inc. VGZ 0.28

Metallica Resources Inc. MRB 0.26

Taseko Mines Ltd. TGB 0.26

Orezone Resources Inc. OZN 0.19

Gold Reserve Inc. GRZ 0.18

Great Basin Gold Ltd GBN 0.15

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nice looking turn in gold yesterday, confirming the uptrend

 

+ opening gap up

+ faded, and gap was fill, and hui even went negative

+ the dip was met with strong buying

 

GLD : 59.81 + 1.07 / +1.82%

HUI : 305.67 + 5.67 / +1.89%

 

are we about to see a jump back over $600? that would look great on the charts

 

my calls from last week: GFI, HMY, ASA : are all kicking a., helped also by weak rand

 

i may take profits on a jump over $600, and buy some laggard juniors instead.

i am close to a double on the calls, and they expire in october

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(i received this from GFMS):

 

As forecast in mid-September's Gold Survey Update 1, sales by the signatories to the Central Bank Gold Agreement (CBGA) ended up far short of their annual 500 tonne quota at just 393 tonnes. This confounds market speculation during much of September that there had been a last minute rush to sell gold before the end of the second Agreement year (on 26th September) and that this was responsible for the period's price weakness.

 

Looking ahead, GFMS also see little reason to alter their belief that sales under the remainder of the Agreement are unlikely to reach quota either on an annual basis or for the full five year Agreement period. We are perhaps on the threshold of an era of more moderate net official sector selling.

 

A detailed press release has been attached.

 

If you have any further questions, please contact GFMS on +44 (0) 20 7478 1777

 

= =

 

SO WHO were the sellers?

 

i suppose it was hedge funds, who had stops at/near $600

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Support / Resistance Levels

 

GCV6.GIF

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Yikyak's Newmont chart (from Advfn); NEM right on support now

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