Gold vs. Stocks, Weekly Close; Fundamentals Firmer

From NFTRH 400 last weekend…

“Gold vs. Stock Markets continues to look good across the board. I realize that BREXIT is on the way and there are those proclaiming how bearish this will be for gold (if no exit, or ‘sell the news’ if exit). Indeed, the going could be rough. But these are reactions to hype and we should not get caught chasing hype around. We should deal with what is and what is currently is gold bullish vs. all major stock markets.”

Here is the updated chart from the segment, with gold obviously even more bullish vs. stocks now that the massive news event is behind us.  We also noted improvements in other aspects of the gold sector’s fundamental backdrop and these of course are also even better now.  The weekly moving averages noted are only everything to the positive technical stance (of this chart that is actually a gold sector and macro fundamental indicator).  Backing out today’s drama, they were threatened a few weeks ago and held.


I realize that the sector exploded upward today on a news event, but it was a news event that was a real (unlike some; ref. the fake Semiconductor-led market mini crash of Q4 2014 when Microchip Semi issued what turned out to be bogus forward guidance) event and this real event fed the fundamental backdrop for the gold sector in both its immediate fallout and its implications going forward.  In most cases, I tend to discount the efficacy of inflammatory news but as noted in this morning’s subscriber update…

“This is a whopper of an inflammatory event.  I often go on about how these media items need to be tuned out.  But this one is different because it is fundamental and it is also indicative of a waning of confidence in centralized monetary authorities, which you may recall was our bedrock theme for a new gold bull market.  We began talking about this nearly a year ago with the macrocosm theme, with ‘confidence declines’ being one of the major planets [in our planetary macro visual presentation]…”

So we can say the miners for instance, are up against resistance.  We can say that the gold and silver CoTs were still bearish as of Tuesday (they were) and we could say that people momo’ing the sector now are going to get hammered, but HUI’s next operating target is and has been 251.  What’s more, a very real event happened this week that was in line with the bedrock fundamental case.

Future inflation comes out of deflation, destruction, angst and a loss of confidence.  First thing this morning our friends at the G7 and the Fed were eating microphones in order to try to settle nerves.  The question now is when will a critical mass of people have had enough of centralized policy management the way Britain has?  Even there, I have my doubts that the Brits are going to manage their own Central Bank much differently than the Fed and others.

Meanwhile, in words and deeds, centralized authorities are on a course to perform the only act they know (I love this damn clown car).


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