"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


Tuesday, November 4, 2014

Bank of Japan's Kuroda Talks Stimulus

There are two things working against gold this evening. The first is the election results showing a wave election in favor of the Republicans which can be interpreted as a repudiation of Obama and his policies. Equities seem to like the results and are moving higher. In the current environment, rising stock markets work against gold.

The second item is the set of comments coming from Bank of Japan governor Kuroda. He is essentially confirming the view that deflation is the major concern of his Central Bank. Along that line, he has noted that "falling commodity prices are positive for the Japanese economy in the long run". Such comments undercut any reason to own gold in the mind of most investors.

Gold has responded accordingly by plunging below last week's low.

In trying to find support levels for the metal, I am forced to move to the long term monthly chart. Please note that gold has fallen to the first Fibonacci retracement level noted by the shaded ellipse. That comes in near $1155. Failure there and gold is set for a test, first of psychological round number support at $1100 but more critically, technical chart support near $1088.


  1. Thanks Dan for burning the midnight oil with your late night analysis. It's not looking good for the metals tomorrow. Pretty soon they will be free, then I can get all I want. All jokes aside, it is discouraging as I am a physical holder of silver. Started buying 5 years ago when it is the price it is now today. Wish I could have dumped some if it when it was in the $40's. Now I'm just going to hold it until the day if reckoning. Whenever that is. Lol

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  3. Yes. Thank you sir for your prolific and clear analysis. I am inclined to say you are doing the Lord's work, but I have a feeling you enjoy the hell out of this.

  4. The US dollar is doing what gold did in 2011

    Kuroda said that falling commodity prices are good for the Japanese economy. How do you make commodity prices cheaper ? Raise the value of the Yen. But instead they are devaluing the Yen via inflation because they think that is also good for the economy. Keynesian logic.

  5. Good evening Dan; Well, coffee and cocoa are in trouble, so the last men standing are the fats and feeders. BTW, glad you got rid of Hubert's Indian girlfriends but now who is this guy above me? A parasite?

  6. Are you sitting comfortably? I find my self constantly drawn back to the subject of Gold, precious metals. Indispensable to homosapians today, several of todays most brilliant minds seem incapable of recognising its increasing relevance to understanding future generations. It is estimated that that Gold, precious metals is thought about eight times every day by socialists, who are likely to form a major stronghold in the inevitable battle for hearts and minds. Though I would rather be in bed I will now examine the primary causes of Gold, precious metals.

  7. Thanks, as always, Dan. 1088 / Goldman's 1050 by year end seems like a given, certainly more likely than 2,000. 891 would eliminate everyone who 'found' gold after the financial crash.

  8. It's morning in America!

  9. usd/jpy new high o move at 114.83. this action confirms that yesterday was just some profit taking ahead of election uncertainty in the items that have been so strong. the bonus system for companies that trade for profit is based on the end of year results, so whatever is ahead tends to stay ahead and whatever is behind tends to stay behind these last 2 months.

    gold ended last year with a $150 trend down droppage. silver unlocks next goal at 14.66. as always, bulls can look for a high volume low, then a lower volume test and rejection to show bottoming action.

    china data is said for weakness in base metals et al, along with 4.5 yr high USDX.


  10. Ags Bottom Line: Hard to argue with the weaker price action this week as markets calm down a bit from the panic led buying last week. Rail transportation hasn’t improved markedly in the east, although the BNSF and UP have seen cheaper rail costs which are indicative of improved performance.

    export sales on deck and as always watch the pit action which begins at 9:30CT in about an hour to see which way big money will play.

    corn bulls like buying 360 with a stop under 20dsma, and soybean bulls like buying as close to 10.00 as possible with a stop below if it breaks below the round number. wheat bulls like buying the 20-dsma as well.

  11. Memory refresher...

    “You will see that you will go to sleep at night, and you will wake up the next morning and see gold bidding at $3,000 per ounce, and there will be no offer, and it will rise by $500 a day. It will come in 2014. They are running out, they don’t have it.”

    Harvey Organ and all the other "experts" will say what when the above scenario doesn't happen?

    1. There was a Seinfeld episode, "The Opposite"…

  12. A couple dayd ago I mused about the effect on the Russian ruble after the latest Saudi oil price cut in USD.

    And now some whispers about possible Russian gold sales?
    Gold quickly smashes through $1100 if those whispers become a reality.

    Russian Ruble Plunges To New Record Low As Central Bank Hints At Gold Sales

    11/05/2014 - 10:14

    The Ruble collapsed another 2% today breaking above 45 for the first time ever as Bank of Russia's Deputy Governor Ksenia Yudaeva suggested their policy was "quite close" to free floating the currency and desperately tried to jawbone the currency. She suggested that further rate increases were possible, that interventions were part of the "policy package" when repo tool ramps up and, most notably, Moscow could use some of its national foreign currency or even gold bullion reserves – now the world's fifth largest hoard – to pay for buying imports if Western sanctions over Ukraine continue.



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