Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Weekly Wrap-Up: Gold and Silver Close with Modest Losses but Miners Gain on the Week
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 24 2017
By: Ira Epstein

Life Under Manipulation
By: Theodore Butler

Legendary investor names his top junior resource stock picks right now
By: Peter Spina, President, CEO of GoldSeek.com & SilverSeek.com

Silver Miners’ Q3’17 Fundamentals
By: Adam Hamilton, CPA

Deflation must be embraced
By: Alasdair Macleod

Gold’s 47-Year Bull Market
By: Steven Saville

Taxes, Macro Signals, Seasonality, US Stocks and Gold Miners
By: Gary Tanashian

The Key to Profitably Ending Precious Metals Price Suppression And Other Markets Manipulation!
By: Deepcaster

The Precious Metals Bears' Fear of Fridays
By: Dimitri Speck

 
Search

GoldSeek Web

 
Gold Market Update - Set To React

By: Clive Maund

 -- Published: Monday, 11 July 2016 | Print  | Disqus 

Over the longer-term the prospects for both gold and silver are very bright indeed, because of the inexorable global trend towards hyperinflation, driven by the stark reality that there is now no way back for the Keynesian extremists who have created the present shambles. Given the current debt structure, any serious attempt to “apply the brakes” will result in a total implosion and collapse of the system, which will disappear into a neutron star like black hole. They therefore have to keep ballooning the money supply and debt until the system is eventually consumed by a hyperinflation firestorm, which will be a more gradual process than a deflationary implosion, which would by comparison be an instantaneous event. This continued exponential debasement of fiat of course means that real money, gold (and silver), which holds its value, must rise in price exponentially to compensate.

Over the short to medium-term both gold and silver look set back to react back significantly, both for fundamental and technical reasons, and we will concentrate on looking at the latter in this update.

On gold’s 3-month chart we can see that following its big Brexit up day, it has continued to rise, but in a rather hesitant manner, and the pause of recent days with a bearish looking “hanging man” candlestick appearing on the chart on Friday, suggests that a bearish Rising Wedge is completing which will lead to a drop soon. We are not talking about a serious drop here, but it could react back to the green oval target zone drawn shown on the chart at the lower channel line and earlier peaks, where there is significant support.

The 6-month chart looks overall positive, but there are two factors that point to an intermediate reversal here that are not visible on this chart, which are that gold has arrived at a target shown on its long-term arithmetic chart, and that its latest COTs are at wild extremes, which we will shortly see, which usually means trouble.

On gold’s 10-year arithmetic chart we can see that it has arrived at trendline resistance at the boundary of the large converging downtrend channel in force from 2011, and it also close to resistance at its 2014 high. If it’s going to turn lower soon, this is a good point for it to do so. The volume indicators shown on this chart are not very encouraging at this point.

The most worrying factor for those of a more prudent disposition is that the Large Specs are all-out raving bullish now, as we can see on gold’s latest COT chart below. Meanwhile the Commercials, who always come out on top in the end, have simply piled up their shorts to higher and higher levels, as gold as continued to advance.

Click on chart to popup a larger clearer version.

The COT chart shown above, which only goes back a year, probably doesn’t drive home just how extreme the current situation is. If not, then the following chart should get the job done. The long-term Hedgers chart shown below, which is a form of COT chart, shows that Hedgers positions are now at frightening bearish extremes. When the reading reaches the red dotted line it is at a normal bearish extreme, which often, but not always, leads to a drop in the gold price. When the reading is way below it, as now to an unprecedented extent, the situation is critical, and please note that I didn’t create this chart, sentimentrader did, and they are not known for being anything other than totally objective.

Click on chart to popup a larger clearer version.

Chart courtesy of www.sentimentrader.com

Your reaction to all this depends first of all in whether you follow the logic of it and agree with it or not, and secondly on what sort of investor or trader you are. If you are a long-term investor, you may simply decide to ride out any correction, but if on the other hand you are aggressive trader, you may want to cash in longs and even consider opening some shorts in the sector, but whichever, it still looks like a good idea to take some money off the table here if you are long the sector, taking advantage of the comparatively high prices now prevailing.

As for possible fundamental reasons for a drop in gold and silver soon, these are a matter of conjecture, but one possibility is an easing of recent extreme fears surrounding the fallout from the Brexit vote, and of Deutsche Bank or Italian banks imploding, with Central Banks and governments riding to the rescue with huge war chests of freshly printed banknotes.


| Digg This Article
 -- Published: Monday, 11 July 2016 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus

Web-Site: CliveMaund.com



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.