“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


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Saturday, April 19, 2014

Weekly Gold Chart

I wanted to take just a short bit of time between firing up the pit smoker and throwing some bovine flesh upon it to put up a quick chart of gold for the readers.

As I mentioned on Thursday, gold is totally at the mercy of events in Ukraine for the time being.

You can see on the chart that the metal has been range bound for some time now ( about one year ). Please keep this is mind when you read more breathless talk about gold being poised for a big move "any time now". How many of these "any time now's" have we read over the last year? Whether it is the GOFO talk or backwardation talk or "Russia is going to dump the Dollar" talk, or whatever.

Technically not a single one of these premises, or others not listed, have changed the technical posture of this market for a year.  If and only if the price breaks out of this range, can we say with certainty that the market has become concerned with these things. For now, it could care less and thus neither should we.



The green rectangle defines the range which is near $1400 on the top side and just below $1200 on the bottom side for a range of some $200. Just last month ( March ) the price had rallied up to the top of the range only to meet with selling. That pushed it back down with it looking likely that it was headed down towards $1200 once more. However, events flared up in Ukraine and gold received some strong bids due to safe haven flows. Those bids came in near $1280.

The circumstances due to these geopolitical concerns have created a new and higher bottom at the $1280 level. However, gold has been unable to push past $1320 for any length of time. That has carved out a new range within the broader range. This is marked on the chart as "Tighter Trading Range".



These two levels are our new boundaries which are confining the price for the time being. If the market senses any lessening of tensions in Ukraine, chances are that $1280 will not hold on the bottom. If not, there is a band of congestion between $1260 - $1240 that will draw it like a magnet should it fail. There is little support between $1240 and $1200 meaning that if $1240 were to fail, $1200 will be tested.

On the upside, only a breach of $1320 would give the bulls the needed impetus to make a run to $1350.

If events in Ukraine fade from traders' minds, the focus will shift back to US economic data with participants looking for clues to the Fed's future actions on in US interest rate front. Any improvements on the jobs front will immediately fan the flames of higher interest rates next spring, which the market continues to waver back and forth on. Higher rates will pressure gold as it should support the US Dollar. Again, we do not know what the economic data will look like and thus that leaves the markets very susceptible to sudden and sharp price swings either way as price responds to changes in expectations or sentiment along those lines.

Lastly, here is the current Commitment of Traders data viewed in chart form as to the positioning of the large hedge funds in comparison to the price of the metal.


There was a rather large shift this week in the positioning of the hedgies as they were both liquidating stale longs and adding new shorts. The combination dropped their current net long position by some 8000 contracts or so. This is the reason for my concern if the $1280 level does not hold - there will be a significant amount of long liquidation among this category of traders if it does not.

In another interesting development, the small traders, the general public, were selling gold this past week as well. Is the bloom coming off the metal for this category? They are net long still but this is the least bullish they have been in five weeks. Sentiment could be changing in the speculative community and that will bear close monitoring.

Happy Easter.

54 comments:

  1. Thank You Dan. Enjoy the Pit and bovine. Happy Easter to you and yours.

    ReplyDelete
  2. A happy Easter to you and your near and dear ones.

    ReplyDelete
  3. Thanks Dan...Happy Easter.

    As far as I'm concerned and from what I've read on various blogs the past several months is that a large majority of the bigger names in the gold/silver blogosphere have pretty much staked their reputations on 2014 as being "the year" when all their cheerleading predictions would come true.

    There's no more wiggle room in my book. The talking heads who for years have repeatedly made predictions based on their supposed insider contacts or their speculative imagination can't keep extending and pretending and making it up as they go along.

    At some point an awakening of sorts will happen in the gold/silver community that needs to ask itself some seriously uncomfortable questions about the over-the-top sensationalist pumper/doomer aspect of it all.
    My sense of it is that the blinders are starting to come off and the tolerance of repeatedly hearing of huge gold/silver spikes and the accompanying bombast is wearing thin within the PM blogosphere. You can only cry wolf a couple (thousand?) times before you eventually get tuned out and ignored.

    2014 is the year when all the Nostradamas' out there either put up or shut-up because if their lofty scenario's or price movements don't come to fruition their credibilty and relevance will be shot.
    Doubling down works both ways. The talking heads out there are either right and win the credibility jackpot or they bust in a cloud of their own hot air.

    Time will tell the tale. I'd love to see PM's spike just like many of you but what I'm feeling is the warm breeze of hot air with 7 months to go in 2014.


    ReplyDelete
    Replies
    1. They lost credibility long ago but does not matter as it will continue to be the same old - dollar collapse, china buying, backwardation, gold is real money and the apocalypse upon us.

      Delete
    2. DarkPurpleHaze, I think that the hucksters your speaking of all over the web crying the end is nigh, and that the dollar is going to collapse, or 50,000 gold by 2020 have lost ALL credibility already. Don't get me wrong, I'm a bull on the metals far down the road from here. Right now we have a giant sucking sound called deflation via collapsing debt and taxation. All the tin foil Nepoleans waiting for the dollar to collapse because of hyperinflation need to take their tin foil hats off and open their eyes to whats really going on right now. Gold and silver will go up mostly because all governments hate cash, and they will be eliminating cash sooner than people realize sucking up every penny they can seeking more and more taxes. The elite will eat your children before they give up the power they hold.

      Delete
  4. Looks like the boys over at zerohedge are working overtime this weekend pumping gold up spinning the Ukraine conflict and wgc announcement terrified how fast it could sell off this coming week. Monday will be interesting.

    ReplyDelete
    Replies
    1. The Prophet Elijah, it's reminiscent of missing flight 370 with the constant coverage. I have that feeling that we will see some heavy selling this week in the metals.

      Delete
  5. http://www.telegraph.co.uk/news/worldnews/europe/ukraine/10774931/Ukraine-crisis-Pro-Russian-separatists-snub-Geneva-deal.html

    Crimea created a precedent : why would eastern Ukraine not benefit from the same treatment? i.e referendum and split to Russia.
    Crimea gives them the inspiration and example.
    So of course, those guys are going to fight for their freedom.
    So we will call them terrorists and send the army.
    So Russia will send troops to protect them.
    So we will be at the brink of war soon enough.

    ReplyDelete
  6. Dan,
    What in hell are you doing interrupting a barbeque to post? You should be cooking and enjoying the time we have. But... I get it, to trade and blog is what you do. 24 hrs hours a day, with the exception of your prayer time.

    ReplyDelete
    Replies
    1. Coinhawk;

      once you get that temperature just right and the meat is slowly cooking, you can leave off babysitting it long enough to drink a bit of cold beer and even post up some charts. Hey, what can I say? I am multi-tasking bar-b-q pitmaster!

      Delete
    2. This comment has been removed by the author.

      Delete
  7. Sell in may...and on tuesday.

    http://2.bp.blogspot.com/-6lIa7BRpW7Y/U09EU2wMnvI/AAAAAAAAzEA/bvKXw_jNoeM/s1600/gold2014.gif

    ReplyDelete
  8. Regarding my comment yesterday about all the 2014 now-or-never predictions...

    http://www.tfmetalsreport.com/podcast/5678/empty-vaults-london#comment-form

    ReplyDelete
    Replies
    1. That particular blogger that you link to above lost all credibility a long time ago.

      He's the guy that would erase selected tineframes from charts and then reconnect the chart at his desired price point if he disagreed with the price action during the period in question.

      He would say the COMEX was corrupt and rigged by evil forces and flying monkeys and then buy futures contracts on the same exchange. Even after he had his account frozen in the aftermath of MF Global, he went back into the COMEX when he got his 80 cents on the dollar settlement. When outed as a hypocrite for his actions by a commenter on his blog, he banned the person who had the audacity to call him on his lack of integrity and intellectual honesty.

      He''s nothing more than an empty hat. Many people have lost their entire life savings listening to him and following his example. Why do you continue to try to drive traffic to his site?


      Delete
    2. Drive traffic there? Quite the contrary.

      More like a railroad crossing with flashing red lights warning of derailment.

      The hindsighted chart revisionist/selective memory aspect you mentioned was a head scratcher at first.
      It's was irrelevant and not useful at all except to reinforce the "manipulation" theme heavily relied upon there.


      Delete
  9. Hilarious, gold getting hammered in Asian trade, once again doing the EXACT OPPOSITE of what the gold bugs and website shills are reporting.

    $1,292 and dropping still.

    Those gold fund managers once again bracing themselves for massive redemptions on Monday.

    ReplyDelete
  10. Mark, I bet you know deep down inside that the London vaults are empty of gold, and the Russians are going to cause a dollar panic dumping the greenback, and Yellen is going to haft to amp up the QE because the US economy is in death spiral, and WW3 is just around the corner. Maybe it's worth mentioning that I just drank an entire pitcher of huckster kool-aid.

    LOL

    .

    ReplyDelete
  11. kwn pm mouthpieces will be screaming bloody murder once again; sparks

    ReplyDelete
  12. The same people who were "certain" about a silver shortage and suspicious about SLV's fluctuating inventory and JPM's short position 3 years ago are doing the exact same pumping with gold, GLD's alleged inventory shortages and fluctuations and a quickly evaporating alleged long position by JPM that by their reasoning was a sure sign gold was headed much higher in 2014.

    And now they barely mention silver or how the silver inventory shortage rectified itself apparently. And JPM's desperate and cornered situation (and Winter Blue) was nothing more than a head game within some people's minds and NONE of it mattered.

    Will it matter now in regards to gold? No one can say for sure.
    Those who insist with certainty that they can feel it coming have psyched themselves out with their own belief system that is so unbalanced that they literally can't envision any other outcome then what they hoped or desperately need to happen.

    I hope the same thing that happened in silver back then doesn't happen to gold going forward but it's hard to ignore the parallels when the same people basically switched to making gold predictions after silver tanked and stayed there.

    The silence on silver since then is deafening. The current talk and rationale about gold/GLD and shortages is a red flag in the same hands of those who were waving silver pom-poms back then.

    Buckle up, rough road ahead.

    ReplyDelete
  13. Wow, gold decimation continues, $1,286

    "But wait, any minute now, I swear!......its all going to implode and gold is going to $5,000!"

    ReplyDelete
    Replies
    1. "With the price smashes of the past few weeks, the increasing desperation of the bullion banks seems palpable."
      LOL. Yeah, sure!

      ""All of these factors will soon combine to break the desperate hold of The Bullion Banks. That said, as their hold frays, you can be certain that they will attempt increasingly desperate measures to hang on. Therefore, you must be prepared to endure these assaults and remain steadfast."
      Those guys really live in a parallel world.
      Hey, donk, what do you say to those people who bought boatloads of silver near 50 $ when you all predicted the end of the world and silver soon to reach 300 $ based on your forecasts?

      But yes, they are right : ONE DAY, prices will go up.
      (maybe when gold reaches sub 1000 $...)
      Meanwhile, my long trade on gold bought at 1280 ended up with :
      - 1/3 out at 1312
      - 1/3 out at 1302
      - 1/3 out at 1392

      Let's see if 1280 support area holds once more.
      Gold is once more losing all of its upwards support.
      There is just no thrust here for now.

      Still, I'm keeping my physical, long-term, for the same reason : the risk of a systemic event is unpredictable, and when it happens, it will already be too late to buy gold. Except from that, to speculate on the long side of gold with paper contract seems quite a strange idea.

      Delete
    2. sorry last 1/3 out at 1292 of course, lol.

      Delete
  14. Shocking events unfolding, silver down to $19.20, looks like it will break to new lows by the end of the week.

    ReplyDelete
  15. Certainly felt like a sheep and was duly fleeced. Tickets to the cinema for 3 -£27, light jacket potato lunch £5.75 each, trip to the pool £6 per head. Walk around private gardens £8.00. Visit to zoo £16 per adult. Dinner out at Chimichangas £100.... Bbq and beer £22.00.

    Time in the company of loved ones....priceless.

    Metals dropped a bit? Ok thanks for the update, please try to leave out the obvious hubris commentators.

    It's a sunny day. Let's celebrate our good fortune to enjoy another day of peace and plenty and thank our lucky stars for such good fortune.

    Interesting film that Divergence. Lots of strong roles for women and independent thought is dangerous to the status quo. Go figure....art is a mirror.

    Thanks for the analysis Dan.

    ReplyDelete
  16. Out of December the stocks first and then Gold had a nice run got a bit ahead of itself and now correcting. Gold is again seeing deflation even though western CB's fight deflation and continue to prop up stocks, banks and Governments. I suspect another final assault on Gold in support of FIAT soon which will be another buy and accumulate opportunity. The best way to play this is to hold and keep accumulating Gold metal and set sell stops at various levels in the paper Gold market as a hedge. It's a win win ultimately Gold is going higher but it's nice to accumulate on the short side using the paper market on pullbacks to build the asset base going long real metal as presented on dips. At least if the sh... really hits the fan you've still got the metal even if the paper short certificate doesn't pay.

    ReplyDelete
  17. Gold stock implosion continues unabated, check out Barrick making new lows, Tan Range and McEwen bound for penny stock status.

    Meanwhile the love affair for U.S. stocks continues, those who stayed in the system and avoided the hype and hysteria at Q & A sessions made vast fortunes and are now comfortably set for retirement.

    For the gold bugs who listened to the hucksters with outlandish predictions, well their financial lives have been ruined and many will have to start all over again, more than likely working part time at Wal-Mart until they are 80 since their retirement accounts have been decimated.

    Never before in financial pundit history has there been such a vicious and painful lesson to be paid by ardent followers who were blinded by the hype.

    ReplyDelete
    Replies
    1. Ya i dont know why gold didnt open at $2000, gun shots were reported in Ukraine.

      Delete
    2. "those who stayed in the system made vast fortunes...For the gold bugs who listened to the hucksters with outlandish predictions, well their financial lives have been ruined..."

      Are you a fan of Shakespeare?
      Why do I smell a bit of exageration lol

      Delete
    3. I personally know people that were ruined by jim, hubert. There were about 9000 owners if trx in 2011. Often whole families were invested in that stock. These people had on average a little over 10.000 shares. These shares came down 4 to 5 dollar. The average trx investor has lost 50.000 dollar. Sometimes brothers fathers and grandfathers were invested in the stock. Meanwhile the board of directors and circle of insiders are enriching them as we speak.

      Mark is not exxaguratimg mark knows the damage that is being done. Do your due diligence and do not under estimate the damage that has been done.

      This is not over yet. Trx will try for below a dollar.

      Delete
    4. And trx isnt even worst of the bunch look at anv from $45 to 3 and dgc from $39 to 3 at its low.

      Horrific almost doesnt describe it.

      Delete
    5. Roger that, Jasper.
      Indeed, I didn't do enough due diligence in this topic, so I won't comment.

      Delete
  18. I must say, Mark has been at his finest in this thread! I always get a good chuckle, and unfortunately for me, deep down, he is/was right.

    One thing I have noticed reading this comment thread, is that there both seems to be a return of negativity, hoplessness and also some eye opening as well in terms of gold. I for one have completely shut down my reading of Zero Hedge and KWN for months now, and must say I live better daily without both of those and a few others I've dropped. TFMR going to a paid version has also likely been a very good thing for me!

    Maybe we are near a bottom, maybe not, maybe not for a long time. Who knows, who cares. Just don't be so married to one asset class that you will kick yourself 20 years from now, no matter what *must* happen because things that must happen don't seem to ever do so, or take much longer than ever anticipated.

    I have learned that, and have adjusted accordingly. I am way more at peace now.

    Mike

    ReplyDelete
    Replies
    1. Cortopassi;
      Mike - I am honestly pleased to hear that you have reached this point and have that peace now. Investing/trading is all about learning and continuing to learn. Life is never constant and change or adapting to what comes our way is the key to success and peace.

      In regards to the perma gold-bull sites - they have been a source of great harm to many people but have managed to enrich themselves in the process of harming others with their wild and outlandish theories. We get GOFO talk, backwardation talk, JP Morgan long this or long that talk; Russia dumping the US Dollar talk; and now we get the empty vault talk. With them, NOTHING EVER CHANGES, except the newest wild theory. And in the event that they are proven to be once more incorrect - well, that's easy - just blame it all on the evil manipulators so that they can keep their reputations intact among their devoted cult followers.

      Meanwhile the market just yawns at it all but those who originate this useless and outright harmful claptrap keep right on at it barely losing a breath in the process.

      It is beyond tragic; it is downright disgusting at this point.

      Those of us who do actually advocate honest money and sound economics and view gold in that light are unfortunately too often cast into the same category with these opportunists.

      At some point in the future, and who knows when that might be, gold will finally move higher. Sadly, instead of the scorn that many of these purveyors of endless hype should have received, they will be applauded, first by themselves for "being right all along" and secondly by those, who never learned to read a price chart and instead relied on them for an "investment strategy".

      It will never change however, especially in the age of the internet. Hopefully some folks will learn to tune them out and read what the market is saying and find some success ( and peace ).

      Delete
  19. I am of the opinion those who trash gold constantly and those who pump it endlessly are both equally loathsome. That is all.

    ReplyDelete
  20. i believe too that some of the internet gold pumpers actually work for the banks, not only to deploy various pump and dump schemes, but also to discredit the entire hard money universe with their outlandish gold buggery.

    ReplyDelete
  21. I have equal disdain for the gold trashers.

    ReplyDelete
  22. i don't read kwn , never have really , but i see its free , so i don't see why everyone is so annoyed with them , with the amount of crap flying around every day in the net , i think they are right there with market watch or any other free msm …. about zero hedge , i sincerely find them useful , and quite well informed

    ReplyDelete
    Replies
    1. Anon,
      KWN, TF and such have caused more damage to the gold community than msm, bullion banks and the "manipulators" ever will. If you respect gold as an asset, or investment, or money, or insurance, then you cannot approve of the ridiculous (at best) or dishonest (at worst) nonsense spewed by those sites. If you still haven't figured this than I'm not sure you ever will.

      Delete
  23. Gold doing what it is supposed to on the way down and that is that it is holding up better than the silver, plat, and palladium. (I do not count copper, as it seems to find false strength from the equities) In any event though, it led the way up and is leading on the way down, only holding down here in the basement from 2.90-3.20. The Chinese own it up to their eyeballs, as they do with cotton. Now, they can not even come up with letters of credit to offload beans. R.I.P. bull mkt story for China; sparks

    ReplyDelete
  24. Abraxas ,

    Ridiculous , dishonest non sense is every where around you regardless of what you are buying , now days there is so much information out there it is up to one self to differentiate what is bull shit from what makes sense , my background is in the institutional business , and I tell you , that dedicated funds who invest in gold give those websites you mention the same respect you give to the daily paper you take with you when taking a crap at the office … you sometimes read it , its fun , its sensational , but it normally doesnt make you money … I do understand , there are a lot of people who got hurt by the sudden crash in the gold market , but thats just the way it works my friend , to blame kwn for that I think its naive imo , you have to stick to what you believe , don't leverage too much , and don't bet the farm … if you think you have lost money , ask Paulson , yet the big cows that hold gold , don't give a rats ass of what going to happen to gold the next two months … they take a look at it 2 or 3 times a year make adjustments , and close the door behind them … if what you do is trade this monster daily , well , good luck , i reckon dan is good advise …

    ReplyDelete
    Replies
    1. Anon,
      I actually made nice money in the gold and silver over the years. The problem is that I lost it, and more, in the miners. I know it was naive, but I listened to the guys like Turk, Embry and Sprott, and I don't want anyone else falling for these "gurus". Why not inform each other on who to avoid at all cost?

      Delete
    2. abraxas and anon; you guys have it figured out and that is to say, breathe through your nose, do not overload, and pay 0 attention to the wiseguys. Those who know will not say, and those who know nothing will talk until the cows come home, and they will have lots of listeners, because most sheep do not realize it, but deep down they really want to lose. Why else are there more slots than blackjack tables and more of those than crap tables and why do most players play the pass line? They want to lose. Anyway, a pretty bearish day as we head into the 2nd qtr and Mark is the only one consistently right, as he stays a confirmed stk bull, but.................what can not go on forever, will not; sparks

      Delete
  25. me too Abraxis. also avoid Jim Sinclair, "Turd", Jim Willie, and Maguire "at all costs".
    i have learned a very expensive lesson about listening to market timers. worst of all, at my age, it doesn't look like i'll get another chance to do it right.

    ReplyDelete
    Replies
    1. to put Sinclair inside the same bag with those three i find a bit too much , but again , this is a free country … I guess

      Delete
    2. Sinclair is much much worse them the others.

      Delete
  26. Replies
    1. No problem, Peckerwood. It's not ordinary :-)

      Delete
  27. Sinclair's predicted mother of all bottoms, March of 2012/13 i forget, was the last f'ing dip i ever bought. you only need to double down a few times to lose your life's savings. i found out too late that the BTFD strategy isn't much different than the Martingdale system. look it up. so i hold a special place for Santa, and it ain't in my heart. the other guys mentioned never had much credibility to begin with, which makes them easier to forgive - and easier to blame myself, which i do (hopefully not forever).

    new post from Dan. thank you Dan - wish i would have found you sooner.

    ReplyDelete
    Replies
    1. Yes, peckerwood, I completely agree with JS and wishing I discovered Dan sooner.
      Good luck, man!

      Delete
  28. It was March of '13. With all the Cyprus "bail-in" hysteria, that big silver mine cave-in, garbage about how lift off would occur before Sinclair's birthday at the end of March. All fucking bullshit, and it ruined people. Jim Sinclair deserves a special place in Hell. I have no nice way to put it.

    I survived, because I had already seen the light, and was pretty much out. But some of my friends were not so lucky. Just weeks later, was it April 15?, kaboom, lights out. Anyone still reading those criminal permapumpers deserves whatever happens to them.

    ReplyDelete
  29. Dan, I DON"T include you in "criminal permapumpers", our differences notwithstanding. Folks would have been well served by your analysis all the way through the last cycle, and I'm sure all the way through the next.

    ReplyDelete
  30. I wish I had just listened to Dan

    ReplyDelete

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