"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


Thursday, December 19, 2013

Long term Gold Chart

This monthly chart reveals possible downside targets IF critical support just below the $1180 level gives way.

Notice the median line and how price is pivoting around this line as it moves lower. This month's price action is especially ominous for price has barely managed to poke its head ABOVE the line before succumbing to selling. Upon closer inspection, one can tell that the selling is picking up tempo. That is why it is imperative that support at $1180 NOT GIVE WAY. If it does, $1155 will be hit in short order, followed by a test of the $1100 - $1089 level.


  1. Dan,

    So, the more I look around comments and the blogosphere, I have never, never seen such pessimism. I have driven myself batty for the past two years watching this action, probably shaved some time off my life too!

    But if anything, for me, I will NOT capitulate. I have capitulated too many times in the past on stocks and mutual funds, and got into gold for stability! Hah!! What a crock that has been for the past two years. I have never been so underwater since 2008 and I got into gold to mitigate craziness, but instead have jumped into the fire!

    Just venting here. I was never a day trader, just someone who I would call a frequent trader, a few times a month. I wanted desperately to get away from that, quite honestly because I am no good at it. Too emotional. Figured physical gold and silver were the way to go. Started buying in the 800s, avg price 1357. Got a lot in it, because of a silly idea of it being a store of value,store of wealth!

    So I am mad. I am mad I have missed out on the stock market rise. I am mad that I went into something that was supposed to protect my wealth and has not.

    Of course, my ounces are still there. And I will continue to buy until the cows come home. If not for me, then for my kids.

    The action is classic. Beat down day after day after day, with a small respite, and then beat down even worse. Must be a textbook way to break a person!

    But I AM NOT SELLING! I may take this decision to my grave.


    1. What timeframe are you looking at.

      Everyone on this site and many others are very US centric in their views.

      The world is changing away from everything US.

      This takes time but will occur.

      The thing that most US commentators take for granted is that the world will continue to support the US borrowing.

      I have been in since 1999 and have made and now lost millions.

      But my only reason for being in gold is for what is happening to the US. No entity on this planet can live beyond their means forever.

      And think about the amazing recovery that MSM, politicians and bankers scream about. The debt will go up another 800 billion this year. Every statistic is continuously changed to make the economy look better. The unemployment rate is especially a joke.

      So in summary the US can pretend all is well but there will come a point where it is not. Then all investors will jump ship.

      So my point is hang in. This game is only starting.

    2. Cortopassi - Mike -

      I think many, many people who invested in gold are feeling the same exact way as you are. Keep in mind that gold is primarily INSURANCE against financial events and against currency debauchment. one buys the metal to protect yourself against that.

      However, think of it this way - when you purchase an insurance policy for your home, you hope you never have to use it. If you have an event, you are thankful that you do but you always prefer NOT to have to claim on the insurance policy.

      Same for gold - just like you would never tie all your spare capital up in buying huge amounts of insurance, you buy what you think you need and then perhaps a bit more if you are especially nervous or fearful. But, and this is important, you also go on with your life as normal not constantly dwelling on the fact that you might need insurance at some point.

      Same for gold - get some physical because of what is occurring in the monetary realm with these Central Bankers but then see what the general consensus is on the rest of the economy among the investment class which is putting money to work. You generally want to have some exposure to what the herd is doing because that is where all the money is going to be put to work.

      Part of good investing also studies to learn when sectors are falling out of favor and when they are coming back into favor. That is why the price charts are so important. By dedicating yourself to studying them, you can learn to recognize these trends.

      Investing is DIFFICULT WORK because it requires constant study and serious dedication. If any thing good can come out of your experience is to Learn from mistakes.

      I have made so many mistakes when learning my craft. I did try to learn from them however and not repeat them. some of the best trading secrets I know have come from studying FAILED trades. If you learn from them, then they have value in that sense.

      Sincere best to you....


    3. John Range;

      AT some point John, the world will grow concerned about the enormous levels of US indebtedness. I think it is safe to say that we will recognize it when it occurs. Think Greece - that was not hard to see. However, right now, the investing world really does not care about the enormous level of US indebtedness. I know that seems perversely stupid, but it is what it is. Who knows when the sentiment will shift? When it does I think we will spot it.

      Sincere best,

    4. How many countries has China signed up to trade in the Yuan. 2 of US staunchest allies over the decades - Britain and Australia amongst them.

      How many physical gold exchanges outside us and Britain are opening up?

      The warehouses being drained of physical. It has to be going somewhere. As you noted not in the west. So where?

      I am an Aussie. For at least 15 -20 years the focus from our politicians has been on Asia specifically China, not the US.

      China's singing long term deals offering US dollars for coal, gas oil and many other commodities.

      So I am not sure I agree with you that the world is not concerned about the US indebtedness. I feel the world are very concerned with the US and are actively trying to open up other avenues for commerce and trade.

      I have no idea how this may progress but as I stated the game is just beginning and you may be right in that it will be visible when the time comes. BUT how visible was the dump in April and June.
      US authorities have done a magnificent job of showmanship. The undying belief that they have everything under control is shown and spoken time and time again.

      IF the markets are controlled by the authorities to enhance the belief all is well how will you know that sentiment has shifted. Won't their dealings in the markets increase as they sense a loss of control. And wont they continue until there is no escape.

      So I am a little sceptical as to whether you will see the signs or won't have a chance to see anything before it happens.

      I am not wanting to be disrespectful so please do not take it any other way than my opinion.


    5. John,my timeframe is up to 20 years, however, I have a shorter term goal of gold being a decent price to possibly need to sell some in 5 years to pay for known college expenses.

      Dan, very good points, and I will try mightily to not let the day to day gyrations bother me so much!


    6. Mike

      5 years. I personally do not think you have anything to worry about. I think most people here are on a much shorter timeline


  2. Sorry for the same old rants over and over.

    But I feel like I must continue to make fun of the hilarious commentary at some of the un-named gold pushing websites who keep promising "any minute now" gold and silver are going to the moon and virtually everyone else is going to crash and burn.

    And each day that goes by, the exact opposite happens.

    It is simply amazing that so called professionals can bleat out the same sorry predictions week in and week out and not get called out on it.

    Even Cramer gets dissed all the time for blown calls, but these gold bugs seem above it all.

    Yet they have cost millions in losses to many followers like my poor Aunt who sits at her screen all day waiting for the next update from James Dines or some other bloke promising to stick it out.

    She absolutely refuses to do anything different than sit and clutch her gold related investments and watch her account balance drift lower and lower each month, when she could have doubled her money elsewhere in some of the big momentum stocks found in many other sectors.

    Sorry if I'm upsetting some of the folks here, but it is only fair to call a spade a space and call these guys out on the same wrong predictions over and over and over again.

    I mean really, it is truly ridiculous and I have yet to hear any one of these "acclaimed experts" outright admit they were wrong.

    Jim Puplava at FSO is the only former gold bull who has repeatedly issued a "Mea Culpa" and goes on to explain repeatedly how and why he changed his mind on gold as a legitimate long term investment for wealth building.

    1. how many ' acclaimed experts' have got it right over the last ten years' including central bankers and economists. If these guys were so good how is the US in such a mess????

      All these guys are good in hindsight.

      The so called gold experts you continue to denigrate just can not believe that investors would rather sink their money into a country with very poor future prospects. They are just waiting for the day.

      The bitterness you show towards these guys is juvenile.

      If you are so sure gold never going up again then short it and while you are at it go long US dollar.

    2. Mark I notice the same theme. But the truth is so many people are so under water with the PM's, especially miners, that they don't want to hear anything negative and prefer to live in a state of blissful ignorance rather than facing reality. Kinda like die hard Elvis fans who think he's still alive.

      For example this is a classic gold "guru" who daily makes a video on the markets and tells people to keep stacking and stacking cause every pull back is manipulative "smackdown" and buying opportunity. Just AMAZES me how many people view his video day after day thanking him for his great advice. He even gives trading tips shorting the DOW even though he says it's supported by QE and that's why it keeps going up.....then why short it?:


      And just for kicks check out this ad like vid by Goldandsilvernow how you can stuff your wallet with gold - the next global reserve currency for making purchases - hilarious looking at this stuff now.


    3. Mark;

      Boy howdy do you seem to catch the comments over here! I think a lot of folks just get upset at you because you remind them of how much money they are losing and of course, no one likes to be reminded of something very painful.

      I do agree with you about those who keep making predictions - I have tried not to do this mainly because I am not clever enough to know when and where markets are going to go next week much less, one month, or one year from now. The truth is NO ONE ELSE DOES EITHER, no matter what they claim. PERIOD!

      The art of trading requires one to check their ego at the door and submit to the decision of the market. After all, that is the only VOTE that matters if you want to make money. Too many people bring a set of preconceived ideas to the market and then try to force the market to align itself with their notion of what it ought to do and when it ought to do it.

      That is just folly and by now I think it has been amply illustrated for those who have eyes to see. Sadly, some will never learn and will sit there until the end blaming everything under the sun, but themselves, for their compounding losses.

      There is an old adage in trading - the first loss is the best loss. That means a loss taken early when a trade goes south is ultimately the easiest to handle. Learning to admit when one was wrong does not come easy to many people. Pride prevents them from seeing.

      Trading/investing requires one to check their pride at the door and leave it there. Sadly, some never learn that either.

      I just hope that some folks have learned a valuable even if painful lesson in all this. My heart really does go out to them.

    4. I agree with the above get the emotion out and look at the facts who would've called buy the DOW in March 2009 a few claim to after the fact. Bottom line nobody knows the exact bottom or top, unless you are a pro day trader chasing pips I suggest playing longer term and that means no leverage or money that is needed at a specific date, all markets move in cycles the best way is to average in and average out. Just as the DOW was a buy after the fact in March 2009 DOW stocks trashed everywhere Gold stocks not so much Gold metal certainly fit that picture now. Basically decade lows and with the cost of the production not far below the current Gold price for many not all producers the market will adjust before long. Buy low sell high over the long term is the best strategy for any asset.

    5. "I am not clever enough to know when and where markets are going to go next week much less, one month, or one year from now."

      I am not clever enough :)
      So let's reformulate without the modesty package, because it is a fundamental lesson for successful trading : trading is not about guessing where markets will go.
      Write it ten times on a sheet of paper :

      - Successful trading is not about guessing where markets will go-

      Successful trading is about detecting optimum opportunities to get in the market at a specific price, with a specific stop loss and a specific first target for some part of one's position, guaranteeing minimal risk and long-term gain, not on one trade, but statistically on a number of them.

      "The art of trading requires one to check their ego at the door".
      Second golden rule of trading.
      Ego is one's mortal enemy.
      Trading, far from newsletter, is a lonely job, where you alone are responsible for your account and resuts. Consequence, to write 10 times :

      -I am are my worst enemy. -

      One must discipline oneselft, one's psyche, one's ego, one's emotions and anger when trading. Constantly. It is a very difficult thing to achieve. You must become a "Jedi" to trade successfully and that's why most people fail.

      This is so unvaluable to understand. Thanks 1000 times to Dan for reminding and reminding the REAL rules.

    6. I am in agreement regarding the goldbugs screaming foul about the evil manipulators! It has become quite a comedy show. What I disagree with is the idea that because the "gold price" is going down it is a bad time to buy physical gold (keep stacking). Buying mining shares or gold futures is not stacking, it is trading and I would certainly defer to Dan and others here as to technical signals as to whether paper gold is going up or down.

      What I find interesting is that with such negative sentiment on "goldish" paper why more here aren't buying. What happened to "buy when there is blood in the water"? I realize this website is about trading and am the first to admit I am no trader. I come here because I really enjoy Dan's insights and think he is one of the few straight shooters out there. I truly look at my physical gold holdings as a better place to put my excess production than the $USD. The paper price doesn't concern me too much as I have a long time horizon. Thanks Dan and Merry Christmas all!

  3. How far below the cost of production can gold fall? Are there no physical limits?

  4. This comment has been removed by the author.

  5. Can't wait to see Dan's expert analysis on the stock market.

  6. Mark - your comments speak the plain truth. I got badly caught up by certain rabidly bullish gold sites and commentators, and travelled from 1720 (November 2012) to 1590, hanging on like grim death, and losing half my account in the sorry finale. Today the rose tinted specs are gone, and the likes of Dan and commentators like you keep me balanced. I'm finally free of the rabid gold bug vortex. I've learned to look at the price action only, no matter what chart it happens to be (gold, oil, stocks or whatever), and never to be emotionally wedded again to any fundamental theme. Keep posting your assessments please.

  7. Time to get a perspective on where we are in the Gold to DOW cycle, this cycle topped at around 45 we've been as low as 6+ now back to 13+ this is a correction in Golds bull market. The Gold bull market will be over when we reach approximately Gold to DOW 1:1 and quite frankly the higher the DOW goes the better. So pick a number DOW 5000, 10000, 20000, 30000 Gold will be about the same sit back and relax enjoy the ride. The second chart showing FIAT capital era shows a clear picture. NOTE the run in the 70's Gold bull market with a similar correction. http://sharelynx.com/chartstemp/DowGoldRatio.php

  8. We all know who is in control, it is the western central banks.

    After QE2, the central banks realized that they have to control the paper price of Gold to control the markets.

    Since QE3 and QE4EVA have been announced the paper price of Gold has been monkey hammered while equities are on a huge bull run.

    We are at point where my neighbours and co-workers are telling me which stocks to buy.

    This manipulation will end, just like the manipulations ended in 1999 (internet stocks), 2008 (Housing Bubble).

    The next manipulation will be the Bond Bubble in 2017-2022. This manipulation will be the grand daddy of manipulations. And nobody will claim to have seen it coming (i.e. politicians, TV folk, financial planners).

    When this manipulations ends, and the music stops playing, there will be only one chair left to sit on and that is the GOLDEN CHAIR!

  9. Here we are this week and next week at the convergence of 3 supports.
    The timing chosen by the market is magic, as those supports were all traced months ago on my chart.
    The market is chosing the perfect time to confront them simultaneously when they meet each other.


    1. P.S : I'm playing the scenario when 1190 are holding this week and 1180 next week because this is a convergence of supports at this very moment, which reinforces the area as a support. Plus we dropped again 50 $, so short of a capitulation now, I see 1180 holding.
      But, as time passes, those supports will diverge and if we attack again 1180, it will more than likely break.
      So, to me, scenario followed is a kind of bounce on 1190 this week, 1180 next week, and then must monitor very carefully volumes and prices of this potential bounce up.
      If volumes are anemic and bounce is just as small as previous ones...boom, probably 1180 won't hold very long.
      As any scenario, only market will tell whether it's the right one or not.

    2. On an end of year note no more from Germany about having their 300 tonnes returned from the FED, perhaps GLD's loss was Germany's gain, couldn't see them waiting 7 years by then the FED could be a 1000 times insolvent holding 10+ trillion of bad assets.

  10. the next wedge will form about 60 lower. The Chinese will then buy more. GS said that ABX will expand with the Chinese. Dan, is right, the Chinese cannot hold this up, but imagine if the Chinese Govt was not procuring reserves to the tune of 1-2,000 tons a year. The country as a whole is basically buying every year the annual global mining output.

    the west is dumping it all in the streets and the chinese are buying. that shows us the amount of western dishoarding. I also believe that there are nations dumping to pay bills, and is being kept quiet. The Anglo-American establishment needs to continue to build China up as the new strawman enemy for WWIII in 8-10 years. This includes them allowing them to keep their currency pegged and acquiring the needed gold. I assume that they already have at least 6,000 tons. By allowing gold to rise and letting fall in this multi-year fashion allows China to get as much as they can with the nod of the anglo-american side. Gold is the only market that I can analyze this way. All other markets are different, though some very powerful force is controlling the whole thing, especially equities.

    This has been a slam dunk year for futures trading. Next year should provide some more predictability until gold reaches 1,000 on that bearish wedge. Same old, same old, no surprises....

    Before anybody gets their panties in a twist, I own more physical gold than most people's total balance sheet. I am just sober and objective. I essentially only locked in 1700 gold with trading profits.

  11. Im happy to buy down here. The problem with a bear market is that you finally take losses and pile on the shorts at the bottom, but in a bull market you can't get in - you're always waiting for the right pullback. I'm 50% in (NUGT) and hope to go long with the rest just above $1000/oz. I've spent hundreds of hours researching gold/silver - this is an easy buy for me, and if i'm wrong i have some real estate at least. I think this will be the only time in my life that l find a 10 bagger. HUI to 600p, then buy more income-producing real estate.

  12. march '14 spoos itching to move above its 1807 high.

  13. real estate, especially in unique areas that can cash flow with a sensible downpayment, like booming oil towns like Farmington, NM, are the new areas. After the nukes drop these will be the towns still open and operating as oil will be needed. Albuquerque, where I live will be the last place to be. the people are too amoral and degenerate there, like in all US cities.

  14. My plan to have an oversize short from 1632 down to 1,000 is basically 70-80% done. Really, if you think about it, another 200 down is no big deal. It is already down 500 over the past year.

  15. once again at kwn they talk of gold backwardation; just pathetic; sparks

  16. New highs once again in all major indexes in the U.S.

    Bail-ins are becoming more and more of an unlikely possibility.

    Stay in the system.

    And stay away from the unecessary Q & A sessions and the "sky is falling" predictions on numerous gloom and doom blogs.

    As predicted, the economic numbers today were much improved and the recovery is just now starting.

    Poor Marc Faber must be pulling on his pony tail in disbelief.


    1. Mark I for one find the humor in your posts and even learn a thing or two (had no idea Faber was sporting a pony tail!).

      And likely you haven't even got into the rum and eggnog for the season yet.

    2. Mark is an aquired taste I have come to enjoy as well. Beats Q&A sessions any day.

  17. Dan , comex claims per oz at comex 79 to 1 …. how can that be possible ?

  18. Dear Dan I just wanted to thank you for your blog, as a layperson it's been very helpful to me in learning about PM, investing, etc. I've lightened up my PM holdings a lot over the last couple of 18 months and am comfortable holding what remains for the next 5+ years. Best wishes to you and your commenters for a lovely holiday.

  19. I just posted another article on another website....


    Thom Beecham is my pseudonym. I also have more gray hair than the man in the photo. :)

  20. good news $ bulls like me; the losers at bankamericamotherlynch have closed their short Yen positions, claiming a move back to 96-97 could be in the cards; good for them; I got it going to 250. "Just Win Baby". sparks

  21. GDX/GLD ratio still pinned at world record lows, GDX only up a paltry 20 cents with gold back over $1,200.

    Brace yourself, looks like another huge down move will be starting shortly.

    Meanwhile Moody's is printing new world record highs, as Mark Zandi and his fellow economists and debt rating experts are now luxuriating knee deep in booze and hookers.

    And mining executives are scrambling to avoid more margin calls and avoid outright forced liquidation of their holdings.

    Tough world out there, the paper pushers have seen enormous wealth gains while the mining industry is mired in the worst depression since 2001.

    1. biggest shareholder in Moody's is the Oracle of Omaha, who in '09 said in an interview that none of the rating services could see the subprime situation igniting a meltdown in the mkts; lost any respect that I ever had for the politically connected one; sparks

  22. http://news.goldseek.com/GoldSeeker/1387574429.php

    The commentary section inGold-Seeker's Chris Mullen's Friday Dec 20th Post is identical to Dan's Post in this Blog; seems like Dan is gaining a certain level of notoriety in the Goldosphere.


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