Precious Metals
Understand that I am making no assumptions here because the analysis has been constructive on a continuing rally (or even cyclical bull market) for the precious metals sector.
Gold is Monetary Value
We preface the post with a statement that has not changed since I began public writing nearly 10 years ago: Gold is not about price; gold is about value. This point was hammered home to me 11 years ago by a person who had much influence upon my viewpoint toward the financial system and its various diseased components at a time when I was ready to listen and understand.
So whether we are talking about 2013’s epic price crash or a new bull trend in 2014, the simple fact is that physical gold itself is a store of monetary value. That applied last year as the value was marked down by greed and confidence and it will apply this year as it is marked up in the face of a likely unwinding of those things. Humans, what funny and hyper kinetic animals.
Precious Metals Speculation
Ah, but this post is about the fun part, the speculative part where we humans can make gains from gaming the simple store of value and its wild little brother, silver. As asset market speculators we care about prices, right? How about the share prices of the completely blown to bits miners that dig the stuff out of the ground?
Part of my job is to tell you what the charts say and this chart says that SLV is breaking down from a trend line and its 2x inverse, ZSL, is breaking up from one. One is below its 50 day moving averages and the other, above.
With the precious metals strong in pre-market, it is helpful to take a current snapshot of the daily technical situation for perspective.
Well I am back already… :-) with a couple different views within the precious metals complex today. First, I added some Fib retrace lines to the 5 minute chart shown earlier. The 62% Fib off of the ‘take a poke’ buy zone only adds emphasis to the shaded support area.
HUI has dropped to a thus far 'higher low' to the critical 217 parameter. Gold Bug sentiment is down to 10% by the Sentimentrader data we most often review. The…
The world expects the FOMC to update its expectations regarding a tapering of Treasury bond asset purchases tomorrow. The world thinks that a tapering of these purchases would be bad for gold.
I think a decrease in T bond purchases would be anything from neutral to a potential positive (see post coming later today on the matter). Regardless, it is time to be looking out beyond FOMC with regard to the precious metals, a most sensitive sector to monetary policy.
So here is a check list of what we want to see in order to press the bull stance.
Yesterday was an impulsive looking move and something of a statement in itself. But now technically, the metals and miners need to gather themselves (after a potential pullback on profit…
Precious Metals (Negative) Bearish Engulfing candles aplenty yesterday ('BE' is only a very short-term bearish candle, with implications over the next 1-3 days at most) Lack of bullish follow-through from…
Broad Market With Europe up this morning and the US market closing yet again right at resistance yesterday (Dow at the top of its Reverse Symmetrical Triangle and SPX/NDX at…