***2014 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
Posts: 6,149 ✭✭✭✭✭
This is a continuation of the monthly trading thread to discuss the trading of PM-related stocks, options, and futures. I'm switching to a quarterly thread due to the lower activity levels. Overall, gold has been extremely difficult to trade as it was overall and is essentially directionless, although trending down.
This is the monthly gold chart for the past 10 years. Notice there has never been more than 4 down months in a row, and that has happened only once before (in the past 10 years). The $1179 level is providing pretty solid support, although $1215 has done a pretty good job also.
Here's the same chart but with momentum indicators. Notice how on this monthly time frame, all indicators appear to be an an extreme low. Looks to me like a reversal is coming, but they could easily remain low for several more months.
As a contrast look at the same chart but for SP500 futures. All momentum indicators are very high, and like gold are probably looking for a reversal. And also like gold, it could yet be a while before it happens.
I can't write off the possibility of $1100 gold just yet, but I do believe that you won't regret loading up - backing the truck up - at these levels ($122x) in just a few year's time (although admittedly, there may be better investment choices).
This is the monthly gold chart for the past 10 years. Notice there has never been more than 4 down months in a row, and that has happened only once before (in the past 10 years). The $1179 level is providing pretty solid support, although $1215 has done a pretty good job also.
Here's the same chart but with momentum indicators. Notice how on this monthly time frame, all indicators appear to be an an extreme low. Looks to me like a reversal is coming, but they could easily remain low for several more months.
As a contrast look at the same chart but for SP500 futures. All momentum indicators are very high, and like gold are probably looking for a reversal. And also like gold, it could yet be a while before it happens.
I can't write off the possibility of $1100 gold just yet, but I do believe that you won't regret loading up - backing the truck up - at these levels ($122x) in just a few year's time (although admittedly, there may be better investment choices).
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Comments
I concur, gold is likely to outperform equities this year. Outperformance can occur even with negative returns.
Knowledge is the enemy of fear
Glen
In addition to a continued supply deficit for Platinum, the supply/demand outlook for its sister metal, Palladium, also appears bullish. Palladium is expected to end 2013 with a supply deficit of over 700,000 ounces, as increased demand for the metal for pollution control continues to increase. In addition, sales of Palladium stockpiles by the Russian Government have been decreasing during the past few years, with analysts estimating that only about 100,000 ounces were sold in 2013. This amount is well below the nearly 2 million ounces supplied in the past, and was a major contributor in keeping the supply/demand picture towards equilibrium. Now that Russian sales seem to be on a downward trend, this key supplier of Palladium will be of diminished importance, and we may see a Palladium deficit of over 1 million ounces in the coming years.
The reporting US banks are heavily short Pall, Plat, and Silver. While at the same time heavily long Gold, Copper, and Sugar to name a few. These guys are more often right than wrong. 3 or less banks reporting
on silver. Speaking of silver and gold, an interesting "conspiracy" article from Ted Butler. My own thoughts were that JPM needed to stock up on both physical gold and silver in 2013. They succeeded.
Butler on JPM
Good articles, RR. To complement the Butler article, there is a conspiracy theory that I've hesitated to mention that at least 200 countries have supposedly secretly agreed to "reset" their currency valuations some time in the next couple of months. The reset is allegedly going to be according to a nation's assets, and once reset, the valuations are supposed to be controlled so they never vary by more than 5%. Details are of course sketchy, and supposedly the USD will be "revalued" downward by 30%. How or what that exactly means I don't really know because a lot depends on what you're comparing it to, but the closest explanation I can see would mean an increase in the USD price of commodities like gold and oil by 30%. Part of this will be an introduction or designation of a new reserve currency that will be backed by gold. So as Butler points out, JPM may be acquiring the metals just for this event in order to hedge their other holdings, or perhaps to facilitate the new reserve currency in some way - if the conspiracy turns out to be true.
Edited to add a reply to Chodk:
<< <i>Bull markets, by definition, never have 4 straight down months. Be mindful when that occurs. >>
I think it depends on the time frame. This would be the first red annual candle in 13 years. You could argue that we were due. But does one red yearly candle mean the bull run is over?
Only Warren Buffet uses yearly charts. Given the nature of a fiat currency system that is designed to create some inflation, all asset classes increase in value over time. One red yearly candle wouldnt mean the end, not would 10 of the next 20, but that would be one heck of an agonizing time period.
Ive been expecting PALL to drop all year. The COT reports show that it should, but its stubborn. At $700 it has no relative value opportunity among other commods so I view it as a nontradable.
Knowledge is the enemy of fear
"Speculators' silver-futures shorts surged to extreme bull-record levels less than a month ago. And they've barely started to mean revert, which means big buying to cover is still coming soon. While speculators' silver-futures positions are always a great contrarian indicator at extremes, exceptional shorts are the most bullish portent of all.
Unlike new long-side buying, short covering isn't optional. Silver futures' hyper-leverage guarantees that speculators have to quickly buy to cover as silver's price rises. This feeds on itself, igniting a buying frenzy as traders rush for the exits. The bigger their aggregate shorts, the greater the rally their covering sparks. So the recent bull-record shorts are a super-bullish harbinger for silver and its miners' stocks."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I'm not seeing much in the way of massive short positions according to this data.
Knowledge is the enemy of fear
<< <i>chart
I'm not seeing much in the way of massive short positions according to this data. >>
I'm not seeing it either in the COT report, that's why I posed the link as a question.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I'm not seeing much in the way of massive short positions according to this data.
Knowledge is the enemy of fear
That, and a headline like this seem to indicate that the bottom may be in:
Gold analysts most bearish since 2002
It might be worthwhile to some to look at the agricultural sector for some potentially bullish trades.
Knowledge is the enemy of fear
<< <i>These threads have been a great indicator of direction----this thread is dead compared to 2 years ago.
It might be worthwhile to some to look at the agricultural sector for some potentially bullish trades.
Yeah... sideways. That will change though, later this year. Maybe March...
Too bad this isn't an agricultural forum.
For those who wanna make make money, instead of look for a conspiracy theory to explain why they lost 30-50% of their store of value, take a look at corn. People and cows gotta eat.
Knowledge is the enemy of fear
<< <i>Too bad indeed. Tis better to languish, than flourish.
For those who wanna make make money, instead of look for a conspiracy theory to explain why they lost 30-50% of their store of value, take a look at corn. People and cows gotta eat.
We could discuss the conspiracy theory that is going to cause gold owners to MAKE a mint some time in the next year or so, possibly even in the next few months.
<< <i>
<< <i>Too bad indeed. Tis better to languish, than flourish.
For those who wanna make make money, instead of look for a conspiracy theory to explain why they lost 30-50% of their store of value, take a look at corn. People and cows gotta eat.
We could discuss the conspiracy theory that is going to cause gold owners to MAKE a mint some time in the next year or so, possibly even in the next few months. >>
I'm always open for a good fairy tale, what you got?
BTW---ag commodities having a good day.
Knowledge is the enemy of fear
<< <i>RR, what's your take on the action in PM stocks the last couple of days? The action seems to be more bullish than usual, but I don't follow them as close as you do.
That, and a headline like this seem to indicate that the bottom may be in:
Gold analysts most bearish since 2002 >>
Miners have been due for a pull back for a couple weeks now as they powered past their closing prices of 36-39 days ago. Several seniors (GG, AU, GOLD, FNV) have made new highs. Newmont got totally crushed on
Friday which really tosses a new slant on things. I don't see how the sector continues higher while Newmont crashes on something that really wasn't new news. Some large gaps left behind in GDX and GLD that probably need to
be filled in the short term. Goldcorp has rallied for 30 days which is an eternity in one direction based on 2013 trends. USD/CDN, AUD/USD, and USD/JPY all seemed to have turned in the favor of PMs....at least for now. Those
have been huge headwinds in 2012-2013. Still expecting more downside in PMs and miners. But today's bounce shows just how volatile things have become. Newmont's crushing on the news that they were revaluing reserves
and impairments on $1300 gold vs. $1400 gold seemed like a shot across the bow. Everyone in the sector has to be valued per the current price of gold. So why just Newmont? And in mid-January AGI took similar lumps.
Senior gold miners
Individuals do not need gold or silver, and very few want them to keep, but of course everyone would like to have some PMs fall in their lap so they can sell it and buy some of the above.
Liberty: Parent of Science & Industry
<< <i>Yep, people need food, energy, medicine, clothes, shelter, and other things, and most want gadgets, entertainment, sporting goods, travel, and other things.
Individuals do not need gold or silver, and very few want them to keep, but of course everyone would like to have some PMs fall in their lap so they can sell it and buy some of the above. >>
Do people need protection from the economic policy makers?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
Oats up 13%
Wheat up 7%
Soybeans up 4%
Corn up 3%
Jim Rogers has an exchange traded ag etf--RJA. Has it broken its 18 month long downtrend?
Silver did pop about 4% this week also, but gold languished.
This darn Palladium keeps getting my attention...It still has a HUGE move in it and im still thinking lower.
Knowledge is the enemy of fear
<< <i>This darn Palladium keeps getting my attention...It still has a HUGE move in it and im still thinking lower. >>
Agree, I believe the only reason it hasn't followed gold and silver is the "hope" that new auto demand will keep prices high. No logical reason for it to currently be this high.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
<< <i>New vehicle sales are actually quite high and probably stabilize near these levels for several years. But palladium is still overvalued, imo. >>
and all those new catalytic converters help keep palladium overvalued. Once those cars back up on the dealer lots, palladium will return to earth.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Remember all that "unprecedented" demand for silver a year ago? That didnt keep prices from falling, did it?
Knowledge is the enemy of fear
The Farce Is Complete: JPM's commoditeis head Blythe Masters Joining CFTC
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
Ms. Masters heads the largest commodities trading operation at the largest bank in the U.S., JPMorgan Chase (JPM). In the mid-1990s she developed and marketed credit derivatives.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
<< <i>Oats futures have risen almost 50% since early December. I can hear it now, "my oatmeal has doubled since last year year. Inflation is rampant". >>
Actually, MY oatmeal (granola) has been going up every year for the past 4 years, regardless of which direction oat prices were moving....close to a double now. My soy/almond milks have effectively doubled in price in the last
2 years. Today I stopped at my fish market on the way home and found that they just raised Salmon prices 13%. That's the 2nd 13% bump in the past couple of years. I guess it's getting time to exercise my BLS "substitutional"
effects "rights" and step down to lesser quality brands loaded with more fillers, chemicals, and carcinogens. My wife found out the other day that a substance in the Yoga mats she uses is one of the constituents of Subway grinders
(bread). I eat a lot nuts and those prices have only been going higher the past 4 years as well. The service/handling/preparation fees handled to raw foods apparently FAR overshadows the cost of the raw material. When I finally
see something that I consistently eat throughout the week come down in price, I'll let you know.
<< <i>
<< <i>Oats futures have risen almost 50% since early December. I can hear it now, "my oatmeal has doubled since last year year. Inflation is rampant". >>
Actually, MY oatmeal (granola) has been going up every year for the past 4 years, regardless of which direction oat prices were moving....close to a double now. My soy/almond milks have effectively doubled in price in the last
2 years. Today I stopped at my fish market on the way home and found that they just raised Salmon prices 13%. That's the 2nd 13% bump in the past couple of years. I guess it's getting time to exercise my BLS "substitutional"
effects "rights" and step down to lesser quality brands loaded with more fillers, chemicals, and carcinogens. My wife found out the other day that a substance in the Yoga mats she uses is one of the constituents of Subway grinders
(bread). I eat a lot nuts and those prices have only been going higher the past 4 years as well. The service/handling/preparation fees handled to raw foods apparently FAR overshadows the cost of the raw material. When I finally
see something that I consistently eat throughout the week come down in price, I'll let you know. >>
The problem is that you bought into the "foods cause cancer" marketing gimmick. You wont find this-- "something that I consistently eat throughout the week come down in price"-- because the marketers have you hooked. Dont feel bad though as you are not alone. Millions upon millions have done so, and the companies that produce food products have been able to raise prices while raw materials costs have dropped. That usually translates into HIGHER PRICES and a HIGHER STOCK MARKET. Nah, stocks are only higher because the MIGHTY BERNANKE deemed it so.
......these charts could be indicating that raw materials are going to increase, so that should hurt margins and corporate profitability and contain the rise in stock prices that PM bulls find so unconscionable.
Knowledge is the enemy of fear
It ain't no gimmick. Over the past 5 years I've probably put in a few hundred hours of research on numerous nurition topics. There's no doubt in my mind that a poor diet is one of the major risk factors of today's leading disease
(ie heart disease, cancer, diabetes, Alzheimers, and general bodily inflammation). Sure, stress, lifestyle, exercise, smoking, and the bad air and chemicals you are exposed to all play a role. But what you eat is just as major of
a player, probably the biggest player imo. With a proper diet across America you'd see a 50% reduction in heart disease and common causes of cancer. If you can't see the massive change in the quality of our food over the
past 50 years, there's not much I can do to convince you otherwise. Yes, foods do heavily contribue to cancer. Eat a proper diet with all the key nutrients (vit, minerals, fiber, antioxidants, no dead foods, less meats, less dairy,
etc.) and your risk of disease is reduced. There will always be exceptions to those eating a great diet who die early from cancer. They could have a bad case of weak genes or exposures not seen by the average person.
I've done my research and I buy the foods and supplements that I need to. Marketing gimmicks don't even play into it. One seminar I attended was from the guy linked below. It was informative and I spent $25 on his book.
It is the best researched book I've read on the subject and state of the art on what isn't or is good info on today's nutritional guidance. If you read this and still think health foods are a "gimmick" I'll tip my hat to you. Even
Hippocrates said "food was thy medicine." Unfortunately the food that is pushed upon us today is hardly medicine and certainly not "food." Worse yet, the food grown in soil today has a fraction of the nutrients as it did
50-100 years ago. And it's not like you can eat 5X or 10X the right foods to make up for it. The real marketing gimmick that you have bought into, is that most of what you're eating cannot be called "food."
Guy Daniel's informative book
Surprisingly, the author doesn't buy into most of the health food and supplement fads of the past decade or so. But, he does come out and list a half dozen major things that you should be doing that you probably aren't to
reduce bodily inflammation, which in reality is the stepping stone of nearly all the major disease today, and it starts from food and nutrition or the lack of it. Clearly, the editorials listed below the book title suggest a different
point of view than Cohodk's "gimmick." The gimmick is believing we can fight disease with drugs and more drugs...rather than curing it at the source. Eliminating fast and processed foods from our diets would be a cure for
cancer. Too bad we spend billions on research when the solution is already known and could be implemented tomorrow.
"This book can literally save your life. Too often, medications are marketed for profit, even at the cost of harming many patients, and hiding symptoms which may delay a real cure. Nutritional therapies which are evidence-based
and address the underlying causes of illness, are frequently ignored or belittled by those who have nothing to gain from them financially, or who have limited knowledge or vision. Guy Daniels has done some deep digging into the
medical literature with a clear and unbiased perspective. Here he passes on the fruits of his labor to patients seeking solid information for preventing and curing chronic illness."
--Barry D. Elson, MD
Medical Director, Northampton
Wellness Associates
PS. I get no kick backs are fees from recommending Guy's book....lol. Ask your local Library to get a copy...then you can read it for free. It should be on their shelves any ways. At least those GMO Corn and GMO Wheat charts above are showing renewed interest in harming ourselves.
Why? No, not "inflation", it's primarily because the midwest drought of a year or two ago caused ranchers (generally) to cull their herds, reducing supply in subsequent years; this effect is increased because this year, again in the aggregate, ranchers are withholding females from slaughter to help build their herds back.
So, supply is down, prices are up currently and in the near future, and this is not "inflation", it's market fluctuation. In a few years, the herds will be bigger and prices down.
Ok, how about pork? Pork is more expensive, too. "Inflation"? No, the primary cause is a porcine virus that is reducing supply this year.
Natural gas, the US is now the world's largest producer. But prices for natural gas are up, what gives, is this "inflation"? No, it's a very cold winter straining supply and transport, despite increased production.
Certain fancy products are also not "inflating", but simply in higher demand.
Liberty: Parent of Science & Industry
for an honest perspective on how the beef industry works from birth to market. I don't consider most meats as food as currently prepared and sold to us. You have to upgrade to "fancy" to get rid of the hormones,
pesticides, drugs, active disease, and other "additives" in your beef. The only real choice is to upgrade or eat something else. You can buy range fed beef without foreign "stuff" of any kind but it costs...and the costs keep rising.
You can also go out and hunt your own deer which is not a bad alternative. Comparing the cost of real foods that promote health vs. 90% of what's in the supermarket is like apples vs. oranges. You can't make a proper price
comparison when one item slowly destroys your health while another gives you health. So when someone points out that "food" in the supermarket is the same price as 5-10 years ago I have to chuckle a little bit. Besides
convincing the US populace that FRN's are real money (and for a while BitCoins too).... the FDA & Co. have convinced everyone that we eat "food."
The Omnivore's Dilemma
No drugs, no crowding in pens, no stress hormones from being terrified on the way to slaughter. My wife insists we pay 3x the going rate for this special beef and that it's "worth it"
It is tasty, and when the price goes up even higher, I'll understand that it's not the Fed's fault
Liberty: Parent of Science & Industry
<< <i>Oh, don't worry about my family, RR, we get beef from free range cows that have names and live happily in Montana until they're killed quickly and humanely, butchered the same day, and sent to us overnight on dry ice.
No drugs, no crowding in pens, no stress hormones from being terrified on the way to slaughter. My wife insists we pay 3x the going rate for this special beef and that it's "worth it"
It is tasty, and when the price goes up even higher, I'll understand that it's not the Fed's fault
I fully understand. But the bean counters at the BLS will continue to report the cheapest and most generic raised beef available as the real price of beef. What you eat isn't even on their list of "foods." I pay through the nose
for the small amount of salmon that I eat. It's ocean raised, non-farmed, and costs almost 3X the salmon at your local food mart. Those salmon probably are fed GMO grains with their own feces. I really don't care what the
"regular" price of beef and salmon is because I don't eat that stuff as a rule. I compare prices of real foods. But the FED and BLS are very interested (or only interested) in the price of generic things. Was any beef or salmon
100 yrs ago raised in feces filled pens and injected with drugs and chemicals? I think not. We have to make the "food" of today go further and be affordable to J6P. That means quality has to decline. Just because it fills you up
doesn't make it food. My salmon prices were raised 13% last week. It won't be long before I substitute more whole grains and beans for some of that salmon. It's always the FED's fault though as they are the ones that mess
with interest rates and currency prices (to name a few) that result in misallocation of capital to all things, including commodities (foods, energy, etc.). One could say we don't know the real market price of ANYTHING today due
banks and hedge funds becoming market deciders for everything. Some guy at JPM or GS decides what the price of beef or sugar is going to be. Market supply and demand plays a role but the banker boyz steer prices where
they want to. Eventually supply and demand win out. But for years the boyz can have their way....while you go broke wondering why supply vs. demand didn't work for so long.
book
a time and eat smaller portions. Dog food is not an option.....yet.
Just promise me you won't switch to eating dog food due to the high cost of good salmon, and someday die some crazy old dogfood-eating fool with a giant hoard of gold.
(anyway, being salmon, wouldn't it be cat food?
Liberty: Parent of Science & Industry
<< <i>My salmon prices were raised 13% last week. It won't be long before I substitute more whole grains and beans for some of that salmon. I used to buy 1 lb. every week. Now I buy 2/3 a pound at
a time and eat smaller portions. Dog food is not an option.....yet.
Just promise me you won't switch to eating dog food due to the high cost of good salmon, and someday die some crazy old dogfood-eating fool with a giant hoard of gold.
(anyway, being salmon, wouldn't it be cat food?
My "end of life" and broke fall back would probably be 5 oz cans of dark tuna for $1.20 each. I have no clue what's in those cans but there is probably some tuna, mercury, and assorted goodies. Better than dog food which imo is
100% crap with added chemicals. J6P's dog eats just as bad as he does, maybe worse. Since when is real food for a dog a bag of homogenous dry cubes that have about 100 ingredients? And you feed that to them 2X to 3X a
day. Beans and whole grains are a cheap and healthy alternative to any of the meats, including fish. It's not flashy buy you'll survive and stay healthy with some veggies added. Any healthy food I eat has only advanced in price
over the past few years. Who would have thought that eating properly would cost so much more? I know I could cut my current food budget by 1/2 to 2/3 if I ate processed and unhealthy crap. I watch my competitors at BJ's
wheel out shopping carts full of that junk. Me? I go there for soy milk, 3 lb bag of blueberries, organic spring leaf mix, 3 lb bag of nuts, Palmieri's low salt-low, low chemical tomato sauce (since discontinued and replaced with
processed Ragu), humus, spices, cocoa, garlic, bananas, and some canned beans, fruits and veggies. Won't eat that crappy Ragu. But found out the large can of Hunts tomato sauce with a can of paste is decent. But it takes
some time to make our own sauce now.
<< <i>baley baley baley wow and how much do you pay per pound >>
Here you go wayneme
Liberty: Parent of Science & Industry
<< <i>another good1 ...
book >>
If I had kids I'd probably get that. But....isn't it easier to buy the drugs and let your employer's health insurance cover it? There's a drug for everything that ails you....and a drug for any drug that ails you.
I do eat lots of venison and native stream trout. The exercise I get from those pursuits is much better than pushing a cart around Whole Foods and the mental relaxation provides for much clearer thought than researching beef products fed to mice or reading Jim Willie.
Back to the thread....food commode have been lousy performers over the last few years and will be playing catch up this year. Don't blame Janet Yellen.
Knowledge is the enemy of fear
"bond investors are starting to move funds from riskier junk bonds into the more conservative low yielding treasuries. Do they know something we don't?"
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Equities are showing signs of losing momentum. So what if stocks drop 20%? Will that make metals investors feel better because misery loves company?
Keep praying for PM prices to rally, you're gonna need all the help you can get.
Knowledge is the enemy of fear
<< <i>Keep praying for PM prices to rally, you're gonna need all the help you can get. >>
Long term affect of FED policy on the world economic stage along with US geopolitical mis-maneuvering (Iran, Saudi Arabia) will prove to be a god-send.
The lesson learned will be that experience, not academic theory, should dominate decisions. Greed and corruption will ensure macro failures that result in gold price rallies. As always gold will tell the truth.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
As it did from 1982-2002?
Liberty: Parent of Science & Industry
Grain prices very strong tonight.
Knowledge is the enemy of fear
<< <i>As always gold will tell the truth.
As it did from 1982-2002? >>
Gold did tell the truth from 1982-1993. I don't agree that gold told the truth from 1994-2001 when the gold carry trade was running wild along with the Clinton/Rubin/Summers "strong dollar" policy. Even the big gold
miners like Barrick gold were being instructed by someone to heavily hedge and play the gold carry trade. Barrick made $2 BILL on its hedges in those years....who needs to mine and sell gold? Look at silver's performance
from 1993-1998, much different than gold's. And then Gordon Brown's Bottom came into play from 1999-2001 as they sold over 400 tonnes of UK gold to help bail out hedgers that were in big trouble. There was a lot in play
in those years to suppress the price of gold. It was odd that while collectibles (and coins) and commodities were coming to life again from 1996-2001 but gold was pretty much kept at bay. Didn't make sense. Gold's rise into
2008 and then 2011 was probably partly due to all the shenanigans the Rubin/Summers/Greenspan team did in the 1990's and into 2002. Gold otc derivatives coming about in 2000/2001 was another plus to the Rubin team.