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

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

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

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Gold Stocks Acting as They Should During Market Stress


 -- Published: Friday, 7 December 2018 | Print  | Disqus 

By Gary Tanashian

The macro has moved through a time of moderately rising inflationary concerns when economies were cycling up, many commodities were firm and risk was ‘on’. Contrary to the views of inflation-oriented gold bugs, that was not the time to buy gold stocks.

As I have belabored again and again, the right time is when the inflation view is on the outs, gold is rising vs. stock markets, the economy is in question, risks of a steepening yield curve take center stage (the flattening is so mature now that steepening will be a clear and present risk moving forward) and by extension of all of those conditions, confidence declines.

Well?…

In short, the improving sector and macro fundamentals I’ve been writing about for a few months now continue to slam home as the cyclical world pivots counter-cyclical. And what do you know? Gold stocks are reacting as they should. Well, it’s about time, guys!

The technicals had already made some constructive moves as noted in an NFTRH subscriber update on December 4th. The update concluded as follows…

If the precious metals continue bullish in the very short-term the initial targets for all items will be the declining 200 day averages. If the macro fundamentals are proper at such time (and stock markets weaken again) we can improve the view. If not, then that will likely be a sell area, assuming a rally gets going here.

Chief among the sector’s macro fundamentals is the state of gold vs. stock markets. The Gold/SPX ratio has been rising and that is very positive. But for the herds who’ve been taught to revile gold to turn to gold as a refuge, said herds need to be set in motion… by fear (of losing their capital).

Here is the comparison of SPX and HUI from 2000 that we have been using as a template for the current situation. Very simply, when the S&P 500 bounced and failed into its initial bear market signal HUI bottomed and began its big bull market. The yellow shaded zone tells the story of the stock bull market’s failure (in bouncing to test its Death Cross of the time) and the gold stock sector’s brand new bull in 2000.

Today we have a failing stock market situation (pending the current grind at key support) and the gold stock sector making a move to go the other way. We’ve simply been noting all along that proper – as opposed to imagined – fundamentals need to be in place, and fear needs to come to conventional stock market participants. Then, almost by definition the counter-cyclical sector can rise.

Well, Thing 1 in the chart above sure does look like a failure in progress and Thing 2 is at least constructive since it rose above its 50 day moving average. On a bloody red day today, gold stocks are acting as I’ve wanted to see them act. Funny isn’t it that it is happening with real fundamentals in line? After all those years of phony, cooked up rationalizations, excuses and promotions; the real fundamentals are being rewarded.

As we’ve been pitched global/China growth, cost-push inflation and war, famine and pestilence as reasons to be gold and gold stock bulls, it appears that the sector is as we’ve been noting all along; counter-cyclical and due to benefit fundamentally when the risk ‘on’ trades start to fail in the eyes of conventional players.

As the process moves forward, now comes the fun part. It has been too many years for gold bugs stuck on the outside looking in at the macro party with a big policy spiked punch bowl right in the center of the room. As the efficacy of the inflated bubble wanes, the gold sector fundamentals only improve. In NFTRH we’ll be charting the sector and the best miners regularly moving forward, because there will be exhilarating runs and rough patches alike along the way. But man, it’ll be fun.

NFTRH.com and Biiwii.com

 


| Digg This Article
 -- Published: Friday, 7 December 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 - 2019



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


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, 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 GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, 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.