LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

The Drip, Drip, Drip of Recession
By: David Haggith

Anatomy of an Impulse Move in the Precious Metals
By: Rambus

COT Gold, Silver and US Dollar Index Report - July 19. 2019

Gold Miners’ Q2’19 Preview
By: Adam Hamilton, CPA, Zeal Research

GoldSeek Radio: Bob Hoye
By: Chris Waltzek, GoldSeek Radio

Precious Metals Big Picture, as Silver Gets on Its Horse
By: Gary Tanashian

Why This Gold Rally Feels Different
By: Rick Ackerman, Rick's Picks

Currencies, the most manipulated markets in the world, and gold technical update video
By: Gary Savage

THE SILVER PRICE: Setting Up For A Breakout?
By: Steve St. Angelo, SRSrocco Report

With Willem Middelkoop essay, central bank forum takes a shine to gold
By: Willem Middelkoop


GoldSeek Web

Gold ready for a bounce?

 -- Published: Monday, 2 March 2015 | Print  | Disqus 


The latest Commitment of Traders report shows that large speculators in the managed money category have got their positions down to a point where we could now see a bounce in the gold price. In our last Flash Note, we forecast a dip in the price needed to reduce these longs and that appears to be close to done.

Meanwhile, the financial and economic issues that support an increased perception of risk for financial assets and (therefore) a higher gold price have moved higher, from Greece and the Ukraine in geopolitical terms to US economic performance. We continue to think that a sustained move higher in gold (not just a bounce) is most likely to be triggered by a “surprise” failure of the US economy growth narrative, leading to a stock market decline, a Fed policy reversal (back to easing) and a resulting loss of confidence in the Fed, the dollar and future profitability.

The facts are there for a change in the narrative. GDP growth last year was slower than 2013—not the stuff of a recovery reaching much-expected “escape velocity”. A lot of the growth in 2014 was from a massive build-up of inventories which will soon have to be reversed.

Capital spending is declining, reflecting extreme weakness in oil & gas drilling, which was the driving force in manufacturing over the last four years. Corporations are not investing; they are goosing their stock prices to new highs through debt-financed share buy-backs and other financial engineering.

Corporate profits from the Bureau of Economic Analysis numbers using data from the Internal Revenue Service show year over year declines in each of the first three quarters of last year (4Q is not yet available). In the third quarter, after-tax profits adjusted for changes in inventories and depreciation were 7% below a year ago. Current projections for the S&P500 predict that sales will actually fall in 2015 from last year’s levels.

The depressed gold price is, in our view, part of a tightly-wound set of assumptions in which the cornerstones are accelerating US growth, Fed normalization of monetary policy and a rising dollar—all considered to be gold negative. Without these assumptions, there is no bear case for gold.

If the economic data continues to weaken, we may be only a few months away from a major turn in gold. February's Chicago Business Outlook (formerly PMI) unexpectedly crashed to 45.9, its lowest level since July 2009, missing expectations of 57.5. This is the biggest month over month drop since Lehman in October 2008. New Orders suffered the largest monthly decline on record. Apologists blame the weather and Pacific port closures but did the two dozen economists who were so completely wrong in their expectations not know about the strikes or the cold winter? Nearly 90% of all the data released in February failed to meet expectations (see below). Is this becoming a trend?

Meanwhile, we look for a short-term rally in gold and gold stocks.

Jim Anthony

Jim Anthony is a private investor who trades for his own accounts.  He co-founded Seabridge Gold and has helped to finance and advise a number of junior gold producers and exploration companies over the past 30 years.  His gold market commentaries have been published by Seabridge since 2000. Originally a student of economics, Mr. Anthony has become a disciple of markets: "The tape can tell you much more than any economic model." He is not a registered investment advisor and his opinions expressed above are not intended as investment advice.

| Digg This Article
 -- Published: Monday, 2 March 2015 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2019 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of 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 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, Gold Seek LLC, its affiliates or advertisers., Gold Seek LLC 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, Gold Seek LLC, is strictly prohibited. In no event shall, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.