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 Closing Report: Gold Erases Early Losses to End Unchanged
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 7 18 2018
By: Ira Epstein

Housing Market Collapse 2.0 Has Begun
By: David Haggith

Will the Fed’s Tightening Trigger Another Crisis?
By: Arkadiusz Sieron

Merk Research - U.S. Equity Markets
By: Axel Merk

No currency manipulation by China’s government, yet
By: Steven Saville

India Soaks Up Physical Silver Supply
By: Craig Hemke

50 Reasons Why This Bull Market Has Longer To Run
By: Avi Gilburt

Gold Resource Corporation Expands Arista Mine With Drill Intercepts Including 23.39 Meters of 2.00 g/t Gold, 200 g/t Silver and 2.08 Meters of 1.98 g/t Gold, 1,583 g/t Silver in New Vein Discovery
By: Gold Resource Corporation

“Biggest Bubble in the History of Mankind” Is “Going To Burst” – Ron Paul
By: GoldCore

 
Search

GoldSeek Web

 
Why Gold Ain’t Goin’ Anywhere Anytime Soon: Revisited


 -- Published: Wednesday, 20 June 2018 | Print  | Disqus 

A Monday Morning Musing from Mickey the Mercenary Geologist

Contact@MercenaryGeologist.com

The usually suspect gold bugs and perma-bulls have been quite noisy over the last few weeks trying to convince bullion traders and stock speculators that the price of gold and ergo, the market capitalization of gold stocks are on the verge of a big break-out to the upside. And the unholy believers amongst this cult are still predicting $2000 or $5000 or even $10,000 an ounce, just as they have since the global economic crisis nearly 10 years ago.

 

One well-known pundit has been so bold as to call for $10,000 for an ounce of gold by August 1. It seems he may have appropriated the modus operandi of born-again televangelists who prophesy sequential dates for the end of the world as we know it.

 

This cartoon aptly illustrates my go-to gut reaction to any silly notion:

 

http://www.goldseek.com/news/2018/6-19mf/image001.jpg

 

I opine that any forecast for a near-term breakout of gold to the upside is founded purely on hope and a prayer and will show you why in this short missive.

 

Let’s examine historical evidence pertinent to my analysis. Below is a normalized, 22-year composite record for the price of gold from June 1 to October 31 with 2018’s performance shown in black. Note that each 21-day interval approximates one month of trading.  

 

Our standard treatment of seasonal trends is an excellent predictor for the price of gold as its 22-year term encompasses multiple market cycles with bull, bear, and neutral years:

 

http://www.goldseek.com/news/2018/6-19mf/image002.png

 

The period from the middle of June to Labor Day, roughly trading days 11 to 65, is universally recognized as “the summer doldrums” for the major stock markets and gold. Most professionals in the financial and industrialized world take vacation time for a significant portion of this interval and market activity drops concomitantly.

 

Historically, the price of gold has been flat to negative from early June thru mid-July then upticks a bit thru Labor Day. Early September to mid-October is a strong period for gold as market activity picks up and the Indian buying season kicks in. That said, gold’s average gain from mid-June to mid-October is only 4%.

 

Now let’s turn our attention to gold’s recent relationship with the US dollar.

 

Here is a scatter diagram showing the value of the dollar index (DXY) and the price of gold (Au) over the past 200 trading days and in tabular form, the 50-day, 100-day, and 200-day correlation coefficients:

http://www.goldseek.com/news/2018/6-19mf/image003.png

                                                                                                                                          

DXY - Gold

50-Day

-0.94

100-Day

-0.88

200-Day

-0.85

 

The strong inverse correlation coefficients show that over the past 10 months, when the dollar goes up, gold goes down, and vice versa.

 

DXY has been on quite a roll since mid-April, rising from 89.4 to 94.8 for a gain of 6.0%. During this time, gold dropped from $1346 to $1279 for a loss of 5.0%. These numbers further illustrate the ongoing negative dollar-gold relationship.

 

So what factors could make the price of gold break out to the upside over the next few months? I submit three ideas for your consideration:

 

·         A geopolitical event that causes a surge in safe haven gold buying.

 

·         A severe downturn in the US dollar or a significant change in the current dollar-gold relationship.

 

·         Massive movement of hedge funds onto the long side of the paper gold market.

 

That said, I think the current paradigm for gold is likely to continue with the seasonal low still to come within the next two months and a rising price likely to commence prior to Labor Day and continue thru mid-October.

 

I buy gold on dips; perhaps the current price is a good place to start accumulating?

 

Meanwhile, I invite you to revisit my forecasts in the mid-fall and see how I did versus the buggy-brained gold bugs.

 

Ciao for now,

 

Mickey Fulp

Mercenary Geologist

 

Acknowledgment: Troy McIntyre is the research assistant for MercenaryGeologist.com.

The Mercenary Geologist Michael S. “Mickey” Fulp is a Certified Professional Geologist with a B.Sc. Earth Sciences with honor from the University of Tulsa, and M.Sc. Geology from the University of New Mexico. Mickey has 35 years experience as an exploration geologist and analyst searching for economic deposits of base and precious metals, industrial minerals, uranium, coal, oil and gas, and water in North and South America, Europe, and Asia.

Mickey worked for junior explorers, major mining companies, private companies, and investors as a consulting economic geologist for over 20 years, specializing in geological mapping, property evaluation, and business development.  In addition to Mickey’s professional credentials and experience, he is high-altitude proficient, and is bilingual in English and Spanish. From 2003 to 2006, he made four outcrop ore discoveries in Peru, Nevada, Chile, and British Columbia. 

Mickey is well-known and highly respected throughout the mining and exploration community due to his ongoing work as an analyst, writer, and speaker.

 

Contact: Contact@MercenaryGeologist.com

 

Disclaimer and Notice: I am not a certified financial analyst, broker, or professional qualified to offer investment advice. Nothing in any report, commentary, this website, interview, and other content constitutes or can be construed as investment advice or an offer or solicitation or advice to buy or sell stock or any asset or investment. All of my presentations should be considered an opinion and my opinions may be based upon information obtained from research of public documents and content available on the company’s website, regulatory filings, various stock exchange websites, and stock information services, through discussions with company representatives, agents, other professionals and investors, and field visits. My opinions are based upon information believed to be accurate and reliable, but my opinions are not guaranteed or implied to be so. The opinions presented may not be complete or correct; all information is provided without any legal responsibility or obligation to provide future updates. I accept no responsibility and no liability, whatsoever, for any direct, indirect, special, punitive, or consequential damages or loss arising from the use of my opinions or information. The information contained in a report, commentary, this website, interview, and other content is subject to change without notice, may become outdated, and may not be updated. A report, commentary, this website, interview, and other content reflect my personal opinions and views and nothing more. All content of this website is subject to international copyright protection and no part or portion of this website, report, commentary, interview, and other content may be altered, reproduced, copied, emailed, faxed, or distributed in any form without the express written consent of Michael S. (Mickey) Fulp, MercenaryGeologist.com LLC.

Copyright © 2018 Mercenary Geologist.com, LLC. All Rights Reserved.

 


| Digg This Article
 -- Published: Wednesday, 20 June 2018 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



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 - 2018



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.