Precious Metals (NFTRH 502 excerpt)

From this week’s Notes From the Rabbit Hole, an excerpt from NFTRH 502‘s Precious Metals segment, since I haven’t given the PMs much airplay on the public site lately. It gets a little prickly at one point, with some views on the gold sector’s perma-pompoms but then gets back on track.

Precious Metals

First off, let’s review some macro fundamental charts. We know that bond yield dynamics are not yet favorable and neither is gold’s standing vs. major stock markets.

gold vs. stock markets

Gold vs. Commodities is still generally not good. Now, this (including gold/silver) is actually a sign that the inflation trades live on. Ref. our thoughts in the commodity segment that it may regenerate for one more thrust. An inflation trade can keep the gold sector afloat, but it is not the preferable fundamental backdrop for buying long-term positions. If this does not change I’d look to sell any decent rallies.

gold vs. commodities

Gold rode up to where lateral resistance meets the SMA 200 and predictably halted.


Silver is going sideways. Have I ever mentioned that before? Once? Twice? 100 times?


On the big picture silver and HUI continue to be in what look like long, flag-like consolidations of the 2016 upturn. Unfortunately, that impulsive leg up came under the burden of a gold bug “community” touting everything from inflation to be driven by US bank lending, to the China/India “Love Trade” (the dumbest of all rationales, IMO) and whatever else happened to be handy to spin to the faithful at the time. Since then there’s been a new “fear trade” angle and the usual war, terror and Ebola crap.

IT NEVER WORKS OUT… Well, it does for the promoter because he keeps the newbie gold bugs, the emotional gold bugs and/or the gold bugs who never seem to learn a lesson enthralled and captivated, as if waiting for Team Righteous Money to finally bring home the… gold. There are no teams in the financial markets.

Sorry for the detour, but I get disgusted sometimes. Now let’s get back to actual analysis.

HUI continues to grind the bears and the bulls on the short-term. It currently rests at short-term support after dropping below it and popping back up to fill the gap. Since the Silver/Gold and HUI/Gold ratios are still intact to a short-term rally scenario we can give Huey some rope to either rally or hang himself.


But the issue is that with the fundamentals incomplete at best, a real buy signal on the sector remains elusive. Just spit balling here, but I am thinking that… <end excerpt>

The segment then lays out a strategic but speculative chain of events that includes the broad market view and the gold sector’s role in it before reviewing a cavalcade of gold/silver miner/royalty charts.

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