Sunday metals pre-game, 1/12/2014

 Hello friends,

Lots of good comments in the post below -- I hope this short update doesn't derail the conversations. But I thought it would be a good idea to present an updated version of the weekly chart that should tell us rather soon what gold and silver will do for at least Q1 (and probably a lot longer if $1215 can't hold a weekly close).

How soon? Probably by months end, as the critical 30-week MA (purple) is quickly closing in on the fundamental long term trend line (see magnified version below main chart).




A bonus chart: commenter Elmer H. brought to my attention the Canadian dollar's recent collapse. It's correlation with gold since 1995 is strong. Let's keep an eye on this.

19 comments:

Elmer Habavilo said...

GM -

Yup, that's the chart... Thanks for posting it.. I've actually never seen it before... I've just had a sense of what the CAD is doing ....

Elmer Habavilo said...

By the way, I saw a video of David Morgan talking about his gold and silver predictions for YE 2014... I believe he said 1700 gold and 30-34 silver... Which is about what I independently concluded... He's calling for a recovery year in the metals... I'm on board with that... Sprott on the other hand is talking about 2000+ gold this year... I would find that prediction to be more forthcoming if he talked about geopolitical implications or ramifications of that... I just don't see that happening in a vacuum... though i guess its possible it could happen without too much concomitant escalation of geopolitical issues...

Elmer Habavilo said...

Though I haven't really followed too much who is a pumper of gold, kind of a perma bull, and who has been pretty accurate with predictions, I do recall sprott in late winter 2010 and early spring 2011 saying something like "I think silver can go to 50 here"... I know he gets implicated with someone who I've seen as just flat out dishonest I.e. Eric king... But I think there might be reason to believe he's somewhat accurate and isn't a shameful pumper.... Marc faber is another guy who has been maybe the most level headed of them all as far as gold price predictions.. He usually keeps his enthusiasm in check, and he's had the right idea, even if he doesn't give hard numbers (something which is always obv a bit foolish).... Then there's jimmy Sinclair... God bless him... He's like a 17th century new england preacher meets mining CEO meets paranoid schizophrenic..... Really is like a mystic... Emmanuel Swedenborg or whatever that guys name was... . I stopped keeping track of what he had to say after a while... Though I guess he can still be a "good idea man" (as soros still called jim Rogers decades after their parting)

costata said...

GMJ,

Did you check out that "US dollar Half-Life" chart I linked in the previous thread?

costata said...

OT but this piece by Ambrose Evans-Pritchard has wide ranging implications:

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10575292/Coming-oil-glut-may-push-global-economy-into-deflation.html

(h/t Frances Coppola)

IMO this also touches on the investment "narrative" theme of Bron's latest post here:

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10575292/Coming-oil-glut-may-push-global-economy-into-deflation.html

The figures and perhaps the TA screams "deflation" to some observers such as the deflation convert Albert Edwards of SocGen:

https://twitter.com/edwardnh/status/423583457394958336/photo/1

However it's not difficult to craft a narrative with "inflation" as its major theme due to anticipation of economic recovery, rising interest rates and blow-back on central bank and government policies over recent years.

Fix the system said...
This comment has been removed by the author.
Fix the system said...

I'm going to make a prediction that nobody else is making: Gold surpasses the 2011 high in the next 18 months or less. I say this because I feel that market psychology is such that as soon as we make any reasonable progress in the gold price, say past 1350 to 1500, people who missed out the first time around are going to pile on with leverage quickly.

Elmer Habavilo said...

Fix the system -

i posted in the last comments section that I thought the YE 2015 price of gold would be 2500. I think it will take a while to get back to 1600 - 1700... i think there will be some resistance there... what you say about 1350 - 1500, i would say about 1600 - 1700... my predictions are 1600 for YE 2014 and 2500 for YE 2500... For this to happen though, i think we need inflation to overpower deflation at least for a while. I dont follow it much, but i just looked at the chart of the Baltic Dry Index , and i see only deflation there. Looking at the CAD, there is maybe a bottoming going on, which would point towards higher gold prices / inflation if that were the case.... but thats way too early to say... i havent noticed much in the way of food inflation in the stores in europe. Also , ive seen a bit of a pullback in some food items. I believe chop meat, and beef prices have been moving up though (possibly from extreme cold in the USA?).. anyway for what anecdotal stuff is worth..

I heard that the US govt is announcing that they are changing the way CPI is calculated again... im not sure if thats true, but if it is, that seems suspicious. Im on the lookout myself for nascent inflation because i cant rely on govts' figures... of course health care in the usa continues to go up... there is also some evidence of inflation of fines and fees from administrative authorities and courts... nothing out of hand yet though... and the Baltic Dry Inddex and the commodities indices remain down or unchanged... i suspect inflation will start showing up somewhere (in an exaggerated way) in the USA or europe... or maybe it will be held off for a few more years, or 5 or 10 years even... i remain suspicious though... the UST 10 yr having pulled back from 3.0% to 2.85 would seem to militate for deflation also... the question there would be at what point do effects of a higher 10 year start to show themselves more... maybe at 4 or 5%? Most people dont seem to understand that generally speaking for the health of an economy, interest rates can rise "in a good way", or they can rise "in a bad way". I dont accept the oft-repeated idea that interest rates rising in the USA at this point could be anything but a bad thing for 95% of americans.

Elmer Habavilo said...

correction to my last line of my last comment:

I see the laughably simplistic idea that an interest rate rise in the usa would be a sign of "the economy picking up again"... even if technically an argument for that could be made in a theoretical sense, i view a rise in interest rates in the USA in the current economy to be an unadulterated bad thing for 95% of americans. theres this simplistic notion out there that interest rates increasing always mean the economy is "picking up" or looking more positive... seems pretty obvious to me that it all depends on the economy and situation one is talking about though... interest rates can go up for bad reasons or they can go up for good reasons... in the USA and western world at this point, it would only be "for bad reasons", i.e. a bad thing, an omen of bad things to come... the financial press often tries to obscure this obvious fact... people are stupid though... interest rates in general are relatively inscrutable for 80% of even the 1% of the population that actual thinks about the concept of interest rates on a regular basis.

Elmer Habavilo said...

To STFUers... What's the sell gold crash JPM thing about? Max keiser I guess was saying buy silver and u can crash JPM... So I guess that is a way to say "alright, that idea obviously didnt work"?

Warren James said...

@Elmer, it's a permanent link to KD's parody of recent goldbug commentary which observes that JPM is now long gold, hence we can crash it by massive selling of gold (by their own logic!), easily highlighting the internal incoherence of the common gold narrative.

And yes, Max's idea didn't work - positive proof being that many people bought silver during the campaign but it's 2014 and JPM is still around.

Elmer Habavilo said...

Re. "Sell gold, crash JPM", there does seem to be quite a bit of hyperbole and speculation out there in the silverogosphere... Like I do a fair amount of speculation obv, but I'm just taking somewhat educated stabs at things... I recall keiser saying that there would be some big collapse in April 2013... So he's going to be a target for mockery.... And the idea of crashing a bank because you get a bunch of listeners to buy a few ounces of silver... I mean where's that gonna go.... Rabble rousing... And trying to pretend one knows more than one does... Idk... It's dumb stuff... Keiser seems to talk out of his ass sometimes, like a lot of ppl in the media.... Also, how do a few thousands listeners spending a bit of money affect anything really... And I mean JPM is a huge bank... A wrist slap for them is a couple billion (recent settlement with US govt over madoff stuff, for example).... Also wouldn't JPM get bailed out if they got into trouble again? Idk, it seems fairly clear enough that the us govt and JPM don't want currencies competing with the USD, but if silver is ever going to return as a competing currency, wouldn't that take decades? Like a return to the United States old west basically... Is that even conceivable without 50 years and some major wars going by? I just don't see how the keiser thing is anything but a rabble rouser carrying on in his own bubble... There was something about silver derivatives.... How are listeners to keisers show supposed to do anything about that or anything else tho... Did anyone think keiser would cause even a measly million dollars to be spent that wouldn't have been spent anyway? Like I didnt realize there were intelligent people taking this stuff seriously ....

Elmer Habavilo said...

@ Warren... Thanks for the clarification.... Yes the "silver liberation army"... I recall seeing that in passing on the net a few years ago...

But when u say "many ppl bought silver during the campaign", I would guess we are talking about at most 10,000 listeners spending $1000 on silver that they wouldn't have spent anyway ?.... $10 million ... Idk, the whole thing seems like it would be such garbage.... "Silver liberation army"... I've seen some ppl in the metals world who I've found to be very dishonest (Eric king comes to mind)... I mean its one thing to point something like that out and be like hey hes a clown, hes a metals pumper... he totally covers up his calls so as not to look bad etc... That whole silver liberation army though... I'm picturing a bunch of re-re's with cardboard and tin foil swords and shields... I guess I didn't realize that there were others who took that kind of "let's band together and move markets" utter nonsense seriously at all

Elmer Habavilo said...

To clarify, I'm not suggesting KD ever took it seriously, but I mean the sheer amount of money that would be needed to drive a global market anywhere... Like how many ppl ou there gave more than a few seconds thought to the whole SLA thing and regarded it as anything more than a sideshow? I mean banks can obviously be undone by trades going wrong, and assets going bad and all that... But I mean even if that were jpm's portfolio posture at the time, still-- the scale of things... I realize that keiser has a worldwide listenership, but I would guess they are mostly people who wouldn't have a spare $100 for this kind of thing, much less the motivation etc

Gary said...

Elmer, you do write long posts, and plenty of them too. Fascinating stuff.

Interesting post over at Bron's blog:
http://goldchat.blogspot.co.uk/2014/01/what-bafins-konig-really-said-about.html

Good to see Bron doing plenty of debunking recently, much more interesting than trading talk IMO.

Elmer Habavilo said...

thanks Gary... i know im verbose as fuck...

Jeanne d'Arc said...

@Elmer

First off: thank you so much for taking the time to post here, and for setting out your views on our humble site. It is genuinely appreciated. And please do continue to do so.

However, I wondered if we might ask that you might in future perhaps trim your number and length of posts. For example, 10 out of 16 of the comments on this article are yours. We admire your enthusiasm! But it can perhaps seem a little overwhelming to the casual visitor. Also, you run the risk of regular readers just glossing over what you write, which would be a real shame.

Could I suggest that you consider maybe going for just two or three comments on each article, with each one limited to a couple of paragraphs? That way, you'll get your message across better, and you'll get the added advantage of other readers being able to engage with the flow of conversation more easily. That way, they can interact with you more naturally, and everyone will benefit.

All the best,

JdA

Elmer Habavilo said...

Yeah totally JdA... I'll stop the verbal diarrhea heh... Ur right.. It's not helpful .. Thanks for the constructive criticism ;)

Elmer Habavilo said...

And sorry...