Monday, February 22, 2016

Gold Market Related Stories

Mainstream news outlets are now echoing three interconnected stories regarding the gold market, which months ago could only be found among contrarian sites. This made me suspicious. . .

The first story is the "safe haven story". . .

"That's part of a widespread flight to safety that has seen investors dump anything perceived as risky — stocks, oil and currencies like the Canadian dollar — and put their money into investments that are perceived to be safer."

The writer compared the recent volatility prior to the 2008 housing bubble . . .

"'Investors are suddenly waking up to the risks in the market, pretty much like what happened in 2008,' said Robert Cohen, a portfolio manager at Scotiabank's Dynamic Funds."

It seems that they're cooking this story for something big . . . Will there be a big crash before there will be a spike? I can't avoid thinking this way after reading too much content about gold rigging. . .

I suspect that gold will really drop below 1000 USD that will make gold bugs capitulate and lead the financial analysts malign the PM sector once again. . . There is too much good news that make me suspicious. . 

" 'Many gold watchers think the stage is set for bullion to take aim at all-time highs. Citing investor fear that's currently pervading the market, "gold could not only reclaim $1,800 to $2,000 an ounce but actually move substantially higher," said ABC Bullion's chief economist Jordan Eliseo in an interview with the Australian Broadcasting Corp.' "



And then we also have been hearing a lot about this claimed trend change leading to the "gold-bull story". . .

"The monthly chart of Gold continues to give the most clarity on its prognosis. We have written about the importance of Gold holding support at $1180-$1200/oz, which it did this week. A monthly close above that support adds greater confirmation to a change in the primary trend. Gold has near-term upside potential to $1285/oz which marks monthly resistance and contains the 40-month moving average. Note that weekly resistance is at $1294. In addition, there should be very strong monthly resistance at $1330." 
"The odds favor Gold and gold stocks continuing to move higher before a correction begins. . . . Gold has upside potential to $1285-$1294/oz. The counter-trend moves within very strong trends occur quickly. Gold declined from $1264/oz to $1192/oz in less than three days while the miners (GDX and GDXJ) have corrected 9-10% twice in the past ten days. Unless Gold and gold stocks fall below Thursday’s lows then we should anticipate higher prices in the short-term. A bigger correction will come but not yet."


"Now gold looks headed for $1314. A daily close over $1210 today will be bullish for next week." 
"Bullish over $1214.00 with $1234.70-$1249.70 and $1263.60 as price target 
Bearish below $1207 with $1199.90-$1194.80 and $1189.60 as price target 
Neutral Zone between $1207.00 and $1214.00"


"The upside action we’ve seen in precious metals since mid last month has been impressive. But what’s even more impressive is the fact that, generally speaking, we’re seeing mostly sideways trading and consolidation after each big upward move. That is traditional bull market behavior, and new buyers of both paper and physical are coming to this market at a rate that is exceeding the ability of the cartel to keep prices down. It appears that last month, the cartel was forced into a 'managed retreat' posture, to use GATA Chairman Bill Murphy’s term."

Source: 
Expert Analyst Warns Collapse of Paper Silver and Gold Manipulation May Be At Hand!

And as a result, we are told that investors are flocking into the PM sector. . .


But despite of these three stories, we have here a cautious gold bug. . . 

"However, I would surmise from our conversation that I am at least somewhat more open to the possibility that gold will blast off from $1280 without looking back, leaving in the dust all who were hoping to accumulate bullion and mining shares on weakness."
"Doug describes himself as agnostic on gold but nonetheless maintained a large short position for several years as a hedge against his Treasury portfolio while bullion was falling from 2011’s bull-market top near $1920. Last July, however, he began to accumulate gold near $1060, about $14 higher than the eventual bottom that was to occur in December. He did so partly for technical reasons, calculating that a 50% retracement of the 2008-2011 bull would bring gold down to around $962. His initial bids were nearly $100 above that level because he wasn’t looking to get in at the exact low, but to start accumulating gold when it looked like a good bargain." 
"My trading bias turned aggressively bullish in January with gold trading near 1090. More recently, for a short-term trade, I told subscribers on Wednesday night to jump on the April Comex contract at 1212. . ."  
". . . it has been my practice over the course of gold’s long correction to give rallies the benefit of the doubt to the extent possible. While we kept the $815 target in the back of our minds as gold fell, we were ready to put our skepticism aside if the hourly chart turned bullish. This time, however, I am being especially cautious – not out of fear that I will overestimate the rally’s power and longevity, but that I will underestimate it. We’ve become so used to bullion rallies that spike and then detumesce rapidly that this may have inured us to the real McCoy if and when it comes. If the current rally is indeed the real deal, we should see this confirmed by thrusts that turn minor “Hidden Pivot” rally targets into chop suey. The most immediate of them lies at 1280.00, whence, as noted above, a tradable pullback would become very likely. If the April contract makes short work of it, however, that would further shorten the odds that the rally is more than the bull-trap tease to which we’ve become accustomed. Moreover, and as I detailed here a week ago, an uncorrected push above the 1308.00 ‘Matterhorn’ peak recorded in January 2016 would turn the weekly chart impulsively bullish for the first time in years. That would provide the strongest evidence we’ve seen to date that the bear market begun in 2011 is over." 
"Whatever happens, it was predictable all along than any bull market in gold would develop in such a way as to leave even bullion’s most devoted supporters skeptical. Assuming the rally continues to make its way higher by fits and starts, on low volume and without a sustained push, you should start asking yourself now whether you might be in the group of war-weary gold bugs that the bull is trying hardest to fool." 


And this story appears to be a confirmation of my suspicion . . . 

"Gold will plunge to US$725 approximately by the end of March 2016 then go parabolic to US$3,500 approximately sometime between November 2016 & February 2017!"

It sounds like a combination of Phoenix Capital and Sol Padha. . . . continued rally of the USD and DJIA. . .

Source: 
Gold & Silver To Plummet By End of March – Then Go Parabolic!

And finally, listen to an expert in Chinese gold market . . . but his story is not about China. . . . It's Venezuela. . .

"Venezuela’s economy is in dire straits. Adding to failing economic policy by the government the country gets nearly all of its export revenue from oil, of which the price has declined roughly 70 % since 2014. Venezuela’s foreign exchange reserves are dwindling fast, from $24.2 billion dollars in February 2015 to $14.8 billion dollars in November 2015, while Inflation is said to be triple-digit and Credit Default Swap (CDS) data shows that traders see a 78 % chance on default, according Reuters. In an effort to avoid catastrophes the BCV has a very strong motive to employ its official gold reserves."

Will this decision of Venezuela to sell its gold holdings avert the current rise in gold price? This reminds me of UK announcement sometime either in 2000 or 2001 that floored the price of gold . . .

Or will it have a positive impact on gold price in view of fact that Venezuela's gold has been taken from LBMA's vault?

"Reuters wrote Venezuela’s gold involved in swaps does not enter the market. I beg to differ. Normally, in a swap the gold is sold spot from the client to the dealer in exchange for dollars, while both parties agree to reverse the purchase at a future date at a fixed price. If the gold is physically moved during the swap depends on several factors. Because Venezuela had repatriated 160 tonnes of gold in 2011/2012 this metal left the London Bullion Market Association’s chain of integrity."

It will have a positive on gold price if the crisis in Venezuela's economy will aggravate all the more the deteriorating economy of the world. . . 

"Obviously Venezuela is in a tight spot. The country is trying desperately to survive on its last reserves and the bullion banks seem to offer shark deals. How long this can go on is anyone’s guess." 

Source: 
Venezuela Exported 36t Of Its Official Gold Reserves To Switzerland In January

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