"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


Sunday, September 28, 2014

Long Term View of Gold ( Monthly Basis)

It has been some time since I have posted a LONG TERM ( monthly ) chart for gold. I have been using the weekly and daily time frames for analysis purpose but I wanted to take the opportunity to answer - in this format - my critics and those who continue to deny that gold is currently in a bear market.

Over and over again, we get the same worn-out trite from the gold perma-bulls, that "any day now" gold is going to launch and that the current sell off is a GREAT BUYING opportunity.

This is coming from the same people who also have been assuring us for the last THREE YEARS that based on one wild theory and reckless claim after another, that a big short squeeze was imminent and that the "smart investor" should be buying. They told us this at $1800, then at $1700, then at $1600, most certainly at $1500, again at $1400, screamed even louder at $1300 and now they are down to dealing with $1200.

Every time, it is the same foolish and wild claim - "based on such and such theory or such and such "insider" information, gold is getting ready to launch.

How many of these theories have we tried to debunk over here, incurring as the result the wrath and ire of the gold cult members. Let me name a few once more and recall the breathless and dogmatic pronouncements, as if from on high, that once the markets understood this secret gnosis that only those advocating these things were privy to, it was "the sky is the limit" for gold prices.

Merely listing them here brings back the many battles we have had to fight to dispel these things.

1.) Gold Backwardation
2.) Negative GOFO rates
3.) JP Morgan long side corner of the gold market
4.) Shrinking Comex warehouse numbers
5.) Swap Dealers on the Long side
6.) Hedge funds on the short side ( imminent short covering squeeze)
7.) Death of the Dollar
8.) Phony Inflation statistics
9.) Bank Bail-ins.
10.) WWIII with Russia
11.) Self proclaimed insider London trader and  whistleblower tossing around esoteric claims of huge tonnage of gold buys by "smart money"
12.) Ad infinitum, ad nauseam

If I have left off any of them or forgot any, I am hoping the readers will supply them.

Coincidentally enough, those advocating these theories tend to all have one thing in common - they make money by selling gold, gold-oriented newsletters, gold-oriented website subscriptions or per-click advertising fees, gold-mining oriented mutual funds, gold-oriented physical gold funds, etc.

In other words, all of those pushing these claims and theories, tend to profit as long as they have a steady steam of gullible people that they can separate from their money. They simply CANNOT BE OBJECTIVE. Once the public is convinced that the bull market in the precious metals is over and therefore loses interest in what they are selling, their livelihoods are impacted negatively. What is required therefore is a steady, incessant birthing of new stories, new theories, new claims, to keep the fire of fear ( and greed) alive.

With that in mind, here is a LONG TERM or MONTHLY Chart of gold. I have noted several key areas for the reader. Of course, in hindsight, all these things are clear that were murky at the moment, but that is the beauty of a long term price chart - it provides an unbiased, objective, hard-nosed view of things that anyone without a bias, can easily perceive if they approach it with an open mind.

Note first the "SECONDARY TOP" made two years ago to this very month at the $1800 mark. That is a near picture-perfect/ textbook Technical Analysis  example of a market that was getting ready to transition from one of a bull to one of a bear.

Prior to that however, the key support level near $1530-$1525, which had served to bring in buyers for nearly a year and a half had to give way. All that one could say PRIOR to that level being taken out, was that the bull market was potentially changing to one of a bear but that current price action was one of consolidation/range trading.

Things changed once that $1530-$1525 level gave way as gold then entered the beginning of its current bear market. By definition, most TA students will note that a price fall of 20% or more, from off of a market peak, put a market in bear market territory. One will sometimes see these sorts of sharp falls in price, but then the market rebounds quickly and moves back above the 20% price level and resumes a range trade or even resumes a new bullish leg higher.

This was NOT the case with gold which has not regained that level ( $1530-$1525) in over a year and a half now.

Take a look at one of my favorite technical indicators illustrated below the price - namely that of the ADX and DMI. This indicator is a TRENDING indicator, one which shows the current state of the market, either trending or ranging. With the DMI added to it, it reveals which side, bull or bear, is currently in control of the price action.

Here is an important thing to note - if one goes back to the very beginning of the bull market in gold that began in late 1999 but was not confirmed until 2001, NOT ONCE over that entire period from 2001 - 2013 did the -DMI ( negative directional movement index - which indicates downward price action - ) make an upside crossover of the +DMI ( positive directional movement index). That informed us that in spite of the sharp plunge in price that occurred in 2008 as the credit crisis erupted sending a deflationary shock wave across nearly all asset classes, gold remained under the control of bullish forces. While the uptrend had been halted, the market was merely undergoing a correction and was not ready to change gears to a bear.

Now fast forward to early 2013, the same year that the gold price entered BEAR MARKET TERRITORY and also broke down below key chart support at the $1530-$1525 zone and examine the DMI lines. Do you see it? Yes, the -DMI crossed above the +DMI for the first time since falling below it back in 1999! In other words, a SELL signal was generated just as a key support level gave way on the downside.

The Bear market was thus confirmed.

Also note the Fibonacci retracement levels I have drawn in on the chart. The initial price retracement level noted, the 25% level, came in near $1507, not far off from the key zone $1535-$1525. When that gave way, the next level one looks for is the 38.2% retracement level. That was at $1287. Incidentally, that is why, in my view, the $1280 level was such a key pivot level. The market was oscillating around that number for some time.

You can see from the price action that this 38.2% level served to hold the market in a consolidation pattern for some time as prices moved above it and then fell below it but continued ranging. That has been the pattern now for the last 16 months. However, note that the TRENDLINE I have also drawn in is showing a series of LOWER HIGHS that have been occurring over this same time period.

Translation - while gold is range trading and oscillating around the 38.2% Fibonacci retracement level, the rallies are losing steam with selling coming in at progressively LOWER levels. The range trade is threatening to come to an end with the resumption of a breakout to the downside.

That is not a sign of inherent strength nor is it any indication of a market getting "ready for a moon shot higher any day now". Quite the contrary - it is a market looking more and more as if it wants to GO DOWN, not up!

This is why the "CRITICAL SUPPORT ZONE" is indeed CRITICAL at this point. If gold fails to hold here, right now, and breaks below that zone ( just like it failed to hold the $1530-$1525 zone ) odds are going to favor a move down to the 50% Fibonacci retracement level at $1091.

If that occurs, the -DMI line will cross ABOVE the ADX line for the first time since 1997! It could very well signify the start of a new leg lower in price.

I want to make it clear that I am not saying this is absolutely going to happen as I am NOT IN THE PREDICTION business which so many of the gold perma bulls seem to delight in incessantly doing ( wrongly I should add and with ZERO accountability for their failed dogmatic predictions). Traders merely note probabilities but more importantly, allow the market to speak and inform us of what it is going to do next ( even that is not 100% foolproof).

What I am saying however is that those who keep regaling us with such wisdom as "Keep Stackin", "Huge Gold Buys from Smart Money" etc, are not doing their victims any favors. How much money has been lost by those who have blindly followed their fool's counsel over the last few years? What the message from this chart is saying is the exact opposite of what those charlatans and modern day flim-flam artists are saying. It is saying "Be very careful if you are a bull" right now because the bears are in control of this market and the technical indicators are clearly showing a building bearish momentum.

Gold may well prove the bears wrong in the months ahead but that will show itself on this same price chart. For me, to get the least bit more upbeat on gold's prospects, I would need to see price clear $1400. That would tell me that something has changed in the minds of those who trade this market and that sentiment has shifted in favor of the bulls. For now, CAVEAT EMPTOR!


  1. Don't see any reason to be bullish on gold right now either Dan.

    For the long tern view it would really seem to come down to is there an economic recovery or just more endless QE and 0% interest rates and currency debasement?

    The markets believe in the recovery story that has been sold out there for years now to them, so no need for gold, so trend is down.

  2. Hi Dan,

    Of course, I have nothing to add except that I fully agree.

    One silly question : you were once a famous guest of KWN, in close contact with Jim Sinclair, i.e this gold bugs community sure knew you (as far as Andrew BS Mc Guire who had to answer your comments by saying you were mixing oranges and tomatoes, lol).
    Some of those guys are definitely gangsters (20.000 $ per year newsletter, I have no other name for it), or make money by selling PMs (James Turk and goldmoney, etc...), yet probably not every single expert do : Jesse's american cafe doesn't seem to have a vested interest in promoting gold, still if I quote their last newsletter : "One of the more significant things that I have seen so far this year is independent confirmation from a credible source that there is price rigging in the silver markets, and that this knowledge is being suppressed by the mainstream media in the US."

    Your analysis makes a lot of sense to me, especially when you showed that the "manipulation" is not an isolated phenomenon but is happening also to most other markets down to hogs.
    Haven't you ever been able to convince any of those guys with such rational arguments?
    It's just amazing to me that they preferred to exclude you from some blogs for refusing to sing the same song, than to listen and consider your arguments, at a time when they themselves recognized your expertise.

    Any person with a few functional neurons between their ears should be able to realize that what you explain here is at least partly true, i.e they are at least partly wrong. None of your contacts or people you were talking to at that time from this group ever recognized that and changed a bit their mind or their speech?
    And now that gold lost 700 $ from its top and you had it right, none of them is going to come back to you with a smallest apology?
    It's totally weird.

    1. Hubert;

      the problem with so many of these guys is that cannot change their tune at this point because to now do so would be admitting that they have been utterly wrong for the last three years and their advice and wild claims have ended up seriously hurting a large number of good people financially. Again, I get the emails from some of these folks and their lives have been turned upside down. One can read the desperation in the lines that they write as for most of them, this is money that they will never, ever see again in their lifetime. It is gone, lost, vanished while so many of these hucksters have not been hurt because they are making money even if the prie of gold goes lower because they are selling something gold or silver related.

      If these people did not depend on higher gold or silver prices and increased interest from the general public in buying their product, they might be objective and admit what any unbiased, disinterested and impartial observer can see easily from the price chart - namely that gold has been in a bear market ever since it broke down below $1530-$1525.

      That is why they want noting to do with me. I can trade gold from either the long side or the short side - it makes no difference to me or any other trader. I own the physical stuff as part of diversification for insurance but other than that, I have no desire whatsoever to see prices soar to the stratosphere because I do not want my children to be exposed to the conditions that could necessarily accompany such an occurrence

      Therefore, Unlike those people, I am not LONGING for soaring gold or silver prices. If that comes, I hope to be able to profit from it but I will not welcome the conditions.

      I swear at times that it really seems as if some of the people involved in the gold and silver industry LONG FOR, YEARN and even PRAY for horrendous problems and chaos all so that they can sell their metals at higher prices and exchange them for either paper dollars to buy stuff or whatever.

      They will never admit that they were wrong Hubert. Never....

    2. "to now do so would be admitting that they have been utterly wrong for the last three years and their advice and wild claims have ended up seriously hurting a large number of good people financially."

      Yes. I hope as many people as possible read what you wrote, so that they simply don't buy too much gold nor accumulate again and again just like M was suggesting "into weakness".

      Even (I hope not) if they are right eventually someday, they proved that they are totally unable to forecast a bottom price or a timing for it.
      It is so simple for gold bulls who want to buy more to at least WAIT for gold to get outside the downwards channel whose resistance is now under 1300...it's not even 100 $ above current prices. That wouldn't put a dent in their wallet, and that could avoid them to buy 300 $ above the real bottom.
      Bottom picking is for fun and requires some trading skills and a stop loss, with minimal positions imho. Bottom picking via accumulation "into weakness" because this is "good value" in the middle of a bear market is a fool's errand.

      Thanks for fighting the tide of stupidity!
      Have a great week, Dan.

  3. Damn good thinking, Dan.

    None of us should be surprised at the lack of conscience demonstrated daily by the pm donkeys.

    I feel gapping action this afternoon in the pm's and currencies. Stks getting VERY interesting also. that is all from rainy and cooling off Sparks

  4. all right lets fire up the systems, <3 hours til ES NQ GC EC CL et al reopen!

    'wyckoff volume method' is great, wyckoff was a star in the 1920's.. what it means is high volume lows or high volume highs get retested. like with silver recently all the lows had volume, so it was likely it would go down to another one. finally what is wanted is a lower low or lower volume, then a spring back above for a good low.

    with gold that first low into 1179 must have been high volume. so last december low didn't even get to 1179, only 1181 and volume must have been much lower. so where we are is still the 'ideal' gold move is below 1179 on lower volume, and then spring back above that would get more big boys interested.

    commodity bulls will be happy to get the qtr over, and look at this the mid-yr election pattern forecasts more weakness!

  5. After refusing to move lower the last few days, cattle futures moved significantly higher to finish the week. October live cattle futures were up $3.00 at $158.45 on technical price action and speculative buying. Speculators continue to hold record long positions.

    Hogs: Anticipation is for lower trade on
    Monday following bearish data out of this afternoon’s Hogs and Pigs report.

    coffee right on a trend line, so looks like a spot for the hedgies to try a long.

    sugar may be a commodity pattern for others, i.e. 12-14 sessions down then bust a move up.

    Corn and soybeans continue to be under pressure Friday, trading at contract
    lows. The strong U.S. dollar is hurting prices due to its negative influence on
    exports. Wheat markets were mixed in choppy trade seeing some support near
    contract lows.

    1. Hogs current bid/ask tonight are $3 below last Fridays trade at. We'll see if Fridays report will give this market some better direction next tomorrow but looks like it is in for a weak open. Crude is weak tonight. The inventory report last Tues was lower than expected and the bombing raids in Syria gave oil a lift last week. This is typically a week time of year for crude though. WTI Inventories may start building again with the driving season over. The oil refining capacity in Syria is relatively miniscule...

  6. Gold won't stop going down until the stackers all sell out at the 2002 lows after 5 years of bear action.

    Eventually jsmineset and KWN will fold as the acclaimed experts eventually die off, retire, or their firms fold under excessive fund redemption.

    Bear market rallies not withstanding we have a long way to go before final capitulation.

    CNBC American Greed will have a field day featuring gold pumpers and pushers taking everyone to the cleaners and Madoffing all those poor retiree accounts.

  7. This comment has been removed by the author.

    1. 13.) QE to infinity
      14.)JPMorgan stuck with a massive silver short position they can't cover.
      15.) London vaults are close to being empty of physical gold.
      16.) QE to infinity
      17.) The Fed can't taper
      18.) The Fed's not reallly tapering

      And in the next few months...
      19.) QE didn't really end
      20.) The Fed can't raise rates

      And by mid year 2015...
      21.) They didn't actually raise rates
      22.) The USD won't break 90

      Thanks Dan.

    2. Darkpurple, do you think there will be no more QE after QE3 ends?

      Do you believe the Fed?

    3. Their insistence on being right on the Fed's rate action is especially puzzling, because the Fed not raising is about the only thing standing between them and disaster. One rates normalize PMs will be off the table for a decade...

    4. If the Fed tries to normalize interest rates the stock markets and housing and all the other asset bubbles the Fed has created with 0% interest rates and QE will also be off the table for a decade.

      Normalizing interest rates in this economic environment would pop the asset bubbles again same as when they tried it pre 2008 and it all imploded.

    5. This comment has been removed by the author.

    6. Barney...who or what do you believe and why?
      Condsider alternative possibilities besides the inevitable collapse scenarios.
      I could very well be wrong.
      Is it possible your scenario is less then a certainty to play out?

      At some point in the future, well after rates rise, I think it possible they'll have to intercede at some point again but not to the extent these various QE's were.
      I think the massive amount of capital they put out there and the huge amount of assets and MBS's they bought up will slosh around in the markets for quite awhile while they largely removed the toxic asset slime that provoked the latest banking crisis.
      There'll be other banking crises at some point in the future just like they'll always be credit and debt cycles that at times allow tightening or monetary expansion.

      I'm pretty sure they'll figure out what seems like the so-called derivatives bomb. But with so many countries and their banks exposed to this seemingly inescapable position (where have we heard that before?) I'm pretty sure they'll escape from it all with some new financial accounting method or maneuver over TIME.

      This low interest rate environment won't last forever. Rates will rise.

      Will the US economy implode because of it OR will the UST continue to be seen as a super safe and relatively higher yielding collateral instrument then most other larger economies are capable of

      We shall see.

    7. Not sure who will be right Darkpurple, was just wondering if you thought the endless string of QEs is over. Or will there be QE4 soon?

      I think thats the point of QE and 0% interest rates, so that it won't collapse.

    8. "I think thats the point of QE and 0% interest rates, so that it won't collapse."

      I would look at that like this...
      "I think that WAS the point of QE and 0% interest rates, so that it WOULDN'T collapse."

      They've taken care of business and are moving on. The last 5 years of huge and extraordinary monetary operations gave them enough time and capital to distort and juice the markets and banks in a way that healed many of the old wounds and fears.
      Think of QE and all the other TARP-like bailouts like a huge unprecedented dose of monetary steroids.
      Now consider the markets and the USD (and US military btw) acting as though they're on steroids and recovered enough to pack a sustained punch for awhile.
      Corporations and banks are flush with cash and low on debt like no other time in recent history.
      (Unfortunately it doesn't seem to have effectively trickled down through the entire economy just yet. Much higher minimum wages will be the trigger to a greater trickle effect...and "some" inflation...which the Fed wants also.)

      The Fed has taken care of what they needed to do in a grand way with those bailouts and asset/MBS purchases and QE etc. that they believe (and hope) will kick the can far enough into the future that they'll deal with it then in another grand way albeit differently then this last time.
      My guess is it'll be the derivatives exposure crisis and they'll throw lots of money around again and they'll sterilize the most toxic or leveraged paper exposure that needs to be extinguished and removed from the system.

      Time will tell.

  8. yet you use GLD in your arguements.

    1. GDXJ. Up 6%
      Dow. Up 4%
      Since Jan 1st 2014

    2. PP-
      add YTD yield on DJIA--so 3/4x2%=1.5% so add that to your DIA performance (actually DJIA is up closer to 5% ytd)+yield is 6.5%
      GDX is only 4%. GDXJ is up over 12%ytd (glanced it on Finviz) --but horrible volatility.

      GDXJ double topped in July and continues to sink…Looks a bit scary to me.

  9. Dan,
    Beautiful logic. Thank you.

  10. For the record, a complete list of KWN "excuses"

    Please add or modify if necessary.

    1.) Gold is in backwardation
    2.) Negative GOFO rates means explosion is imminent
    3.) JP Morgan is long and will corner the gold market
    4.) Shrinking Comex warehouse numbers means no more physical gold
    5.) Swap Dealers on the long side they are always right
    6.) Hedge funds on the short side (imminent short covering squeeze)
    7.) More trade pacts with other currencies ending U.S. Dollar hegemony
    8.) Phony inflation statistics, prices are really skyrocketing
    9.) Bank bail-ins coming, "get out of the system"
    10) World war III with Russia, new cold war now in place
    11) Self proclaimed insider London trader and whistleblower claims huge gold buying
    12) The Dollar is a fiat currency eventually going to zero
    13) There is no economic recovery, QE to infinity
    14) JPMorgan stuck with a massive silver short position they can't cover
    15) London vaults are close to being empty of physical gold
    16) We are headed back to a recession or depression, QE to infinity
    17) The Fed can't taper because its holdings are too large
    18) The Fed's not really tapering it is still buying
    19) QE didn't really end they moved it to Belgium
    20) The Fed can't raise rates without crashing the bond market
    21) COMEX and LBNA default is imminent somebody big will request delivery
    22) The Fed won't raise rates, they will go even lower
    23) The USD won't break 85, will never see 90 in our lifetimes

    We are keeping an ongoing list of all the donkeys and hyenas and their oft-stated predictions.

    1. This reveals that this list poses some kind of threat to your trading.
      If not,why even post meanless nonsense then?
      You seem to know a lot on gold yet continue to bash it.

      I read this blog to get some information on the daily happenings.
      It's funny how Dan doesn't say where he puts his money or what WILL happen.
      Dan just summarizes what happened in the markets that's it. Big deal.

    2. Mark

      Excellent rendition and summary. Good job.
      Ignore the gold cult troll named Paper puppet - he will eventually go away when he realizes that he is making a fool out of himself over here.

    3. No, he does a lot more than that such as warning us not to commit suicide by investing in gold at this time, and not to believe snake oil salesmen.

      Mark, however, needs to get back on his meds, FAST!

    4. In any case, the 10 years bull market, double top, and bear market now is a fantastic psychological case of how markets work and go from total optimism to utter desperation.

      I hope that every gold bug who made the experience of this market and lost money will make the most of this lesson.
      It might have been very costly, but it is really the very best lesson you can learn from the markets.
      If you are able to forget your losses and get back into the markets, you will understand that the market's direction have nothing to do with the opinion of the majority, that a bear market starts in sheer optimism, and ends when everyone gave up and sells into desperation.

      Let this be a useful lesson in the future.
      "What doesn't kill me makes me stronger," - Nietzsche.
      "There is no evil that God can't make a greater good from". - John Paul 2

      Every trader I know had to be hit in the face by a big loss at the beginning of their carreer to teach them humility. They are alive and successful today.
      Let it be your lesson, and start trading / investing accordingly.

  11. Dan,
    it seems you have stopped attending Gene Arensberg's School of Charlatan COT Interpretation. Let me give you the cliff notes:

    Producer Merchant or Swaps Dealer net positions are long or getting longer or less short: the smartest players in the market want to be long or don't see the need to hedge, or see fit to remove hedges: BULLISH.

    Producer Merchant or Swaps Dealer net positions are short or getting shorter: primed for a short squeeze : BULLISH

    Managed Money net positions are long or getting longer: trend followers are bullish and setting the trend: BULLISH

    Managed Money net positions are short or getting shorter SHORT SQUEEZE HIGH OCTANE ROCKET FUEL FOR RALLY: BULLISH.

    in conclusion: BULLISH.

    1. LOL .... If I didn't know better, I would have thought this post was actually written by Kid Dynamite instead of Trader Dan. Awesome writeup!

    2. Kid Dynamite;

      Yes, indeed, a most excellent synopsis of the "expert" for gold and silver COT analysis.

      You did neglect to mention however the following dictums taught there as well:

      1.) Sun rises in the East - bullish
      2.) Sun sets in the West - bullish
      3.) Solar eclipse - bullish
      4.) lunar eclipse - bullish
      5.) blood moon ( end of the world ) - bullish

      bullish, bullish, bullish, and more bullish

      How utterly sad and completely avoidable if folks would just learn how to read a chart and see the trend.

    3. I have seen two claims by goldtards lately, which are getting attention by the sheeple crowd.

      1.) Russia discovered oil in Siberia that is as large as the Gulf of Mexico. That means that they will sell it all to the Chinese and bypass the US dollar as a reserve currency. This will be the beginning of the end for the Dollar and the start of an unprecedented bull run for gold

      2.) Another claim is that only paper demand is down. Physical demand only has been rising and will continue to rise. Once all of the selling in paper gold ends (cause it can't go on forever) the physical demand will drive gold to over $5K in no time.

    4. Yea, if Kid dynamite wrote this....it no doubt would have been more humorous & sarcastic......LOL

    5. A number of American companies have a large stake on that discovery.

    6. If you trading based on COT report ONLY, this is suicidal

    7. Seasonal, sentiment and even ADX could help better

  12. futures opened and no bulls are seen anywhere in anything. oh ZB up 6 ticks.

    it's early, but ags are showing gap downs into new contract lows. usda stocks report tuesday.

    Roughly 50 tonnes of gold have been smuggled into India over the past ten days according to the Hindustan Times.

    Down 12 percent this quarter, commodities are poised for the biggest decline since the financial crisis. Weak global growth data from Europe and China as well as a strong dollar have created severe headwinds for the asset class.


  13. Where is Tom "Houdini" Fitzpatrick ?

  14. Well, a lifetime worth of gains were made in stocks in just 5 years.

    And right now, just in the last 12 weeks, a lifetime worth of FX gains were made by shorting all currencies against the dollar.

    Truly amazing times.

    Never before in history has so much money been made in such a short period of time, by betting against the gloom and doomers.

    1. So that makes you awfully, awfully rich, eh Mark? Are you sure you didn't tumble out of gold at its peak to enter the 'normal' markets at their peak. Out of the frying pan into the fire, so to speak.

  15. Do the Fed and the government interfere in the markets, of course they do. Even constant jaw boning by the Fed is interference. Do they work through surrogates like the big banks is like asking whether predatory animals like meat. When dealing with human beings always look at the lowest common denominator, which is in this case that those in power will do everything possible to remain in power as their number one priority, and if that means putting lipstick on that pig, so be it.

    As investors and traders we do not need to go out on some Messianic mission to destroy ourselves, but simply to recognize manipulation as a brutal fact, and try to use it to our advantage. If the Fed Put is there to support and levitate the market in defiance of gravity, go with it; or if gold is being manipulated then cash in and short it for easy money. We do not need to buy gold and silver, like KWN is exhorting us to do in a Kamikaze mission of self-annihilation!

    The forces against gold are now so great manipulation probably isn't necessary any more having already been used very satisfactorily last year. The negative momentum has been established and we are careening downwards like a Juggernaut, so jump on board, and as they say, don't fight the Fed.

  16. This on Jims mailbox

    "Jim, I continue to hold my gold and shares. What is continuing to make the dollar rise so strongly? When will the tide turn or begin to turn for us? Why didn’t the shares rise with the market? Will they be hit when the market turns down?, Thank You for all you do

    CIGA George

    The fall in the euro due to Russian sanctions is the reason the dollar is higher by mirror image price. "



    A grumpy old man answer. Not objective at all.

    1. Loren;

      The fall in the Euro has everything to do with Draghi talking it down when it was near 1.40 and making it clear that Europe wanted a weaker Euro. They got that because they are in the process of cutting rates while sentiment in the US is that the Fed is going to raise rates.

      To blame the fall in the Euro on Russian sanctions misses all of the above. The Euro was falling well before any talk of Russian sanctions ever surfaced.

      This is what happens when one gets wedded to a particular view.

    2. Interest rate differentials.

      See Dan, here people actually learn something.

      Poor George just got dumb down.

    3. I would have thought that both are habing a role.
      For sure Draghi's declarations were the starting point, along with expectations of respective interest rates.
      But probably the sanctions vs Russia leading to expectations that German's economy is going to stall / collapse are helping to achieve the goal? Of course, it is not the only reason.

  17. Telltale sign of a newbie ? Rant against Mark.

  18. Whenever I hear some trader say he uses Fibonacci Numbers I know this guy isn't making any money. FN is total nonsense. TA as a whole is pure bunk. All you guys who think Trader Dan is the light of heaven are going to be very disappointed.

    1. Tom Kushman;

      Dream on you big dope!

      I am always amazed ( although at this point I should not be) how arrogant you gold cultists are and how much vitriol you direct at anyone who does not swallow your Gold colored Kool-Aid.

      You ignorant fools have done nothing but lose money since gold peaked out three years ago and yet none of you can have the intellectually honesty to admit that your might actually have been wrong.

      As for not using Fibonacci numbers _ I swear by them and think very highly of them as I use them in every single market I trade. Sorry if you are too ignorant to learn how to apply them for yourself.

      Now, please get lost and leave the rest of us sane and normal people alone and go back to the rest of your gold cult pals. You can all console each other and hold each others' hands and sing songs together.

      Good riddance...

    2. Tom Demark and Larry Williams don't believe Fibonacci much but Tom said it depends on how you to use it. He suggested when the price in a new all time high just basing on the highest number then using Fibo. So gold high is 1900, meaning 50% level around 900$. And everything fine when a monthly chart used

    3. Tom, you would be totally hilarious with your statement if you didn't risk to "contaminate" readers who simply don't know enough about T.A.
      I've never seen you post here before.
      Let's say that it's been nearly two year that I'm posting some of trades LIVE with the explanation of WHY, T.A based, and anyone who has a bit of time can go and watch the history of this blog to see that it worked a very great number of times.

      Dan has shown all the time that his support and resistance levels indicated in charts were foolproof and valid. He spends enoug time running this blog that he doesn't need to give you free additional lessons about trading. The very fact that he lives from trading and only from trading after 25 years in the market should make you think twice about how stupid your statement is.

      To claim that Fibonacci and T.A doesn't work just proves your total ignorance about T.A or your total unability to use Fibonacci ratios properly.

      I can give you a hammer, but if you use it to eat spaghetti bolognese and tell me it's useless, should give you an idea of how ridiculous you look to me after your above statement.

    4. Hubert:

      Touche! Ouch - that is going to leave a mark!

    5. He's been right all the way down.

  19. As an addendum to my previous post... I'm not talking sour grapes nor do I have any axe to grind or extreme views. I'm a bit of a math guy and have been around the markets for a few decades. I never made on a job more than $70k/year but retired young with a modest million and a comfortable life annuity. I'm telling you Fibonacci Numbers is dumb and for the superstitious and, by the way, is believed by over 40% of the traders on Wall Street. 50% are on cocaine.

    1. Tom Kushman;
      Please get lost; no one over here cares what you think about Fibonacci numbers. You may thinkg that they are dumb but I have been trading for a living for many years now and swear that the markets I trade have an uncanny ability to find support/resistance near and around those levels.

      Like I said earlier, if you cannot contribute anything but the usual gold cult member drivel, get lost.

      Successful traders learn to work with market sentiment and money flows. If you have not yet learned to do that, then stick around and you might actually learn something but not if you come here with an "" The sum of all market wisdom resides me in" attitude.

      Like I have said many times and must say to you directly - good traders are humble and modest as they become good by learning from getting burned when arrogant.

      Your posts reek of condescension and arrogance, the sure sign of an individual who has much to learn.

    2. Even Fibro not good but the level of 50% worked

    3. I am. I made. I'm telling you.
      You are the "I" kind of guy.
      You are so brilliant, it must be hard to live among the rest of us.
      "I" humbly disagree with you.
      "I" made the proof several times how I used Fibonacci ratios in my trading decisions on this blog and how they pointed precisely at inflexion points, allowing me to make fruitful trades.

      Stop the "I am so great" bullshit and just bring some proof that fibonacci ratios are useless. Maybe that way we'll be able to show you how to use them properly.

  20. This comment has been removed by the author.

  21. A precious metal promoter I’d like to caution investors about is Lindsey Williams also know as “Chaplin Williams”.

    I have no idea how many followers Lindsey currently has, but I believe this guy has reached a lot of Americans by using internet radio.

    I began following this Chaplin’s propaganda mostly because I have a friend in Arizona that is friends with a brother of Eric Cedarstrom. Eric Cedarstrom is an owner of a Metals store in Arizona—Patriot Trading Group--that Lindsey promotes from time to time.

    This Lindsey guy came back out of the “woodwork” in 2008 shortly after the investment bank Bear Stearns began failing in March…this was the time when Silver began a series of price drop corrections that lasted up to the fall of 2008.

    Lindsey began a propaganda campaign on numerous Internet radio stations warning people that the dollar was going to crash very soon in 2008.

    Lindsey promoted the metals in 2008 all through the summer even though they were correcting downwards to lower and lower prices. People who took action on his warning kept losing money until the correction was finally over in the fall of that year.

    Anyways, the Chaplain told listeners that he has special “insider friends” who were from the darker side of humanity and that whatever they told him always happens exactly how it was said.

    So, in the fall of 2008 the dollar was going to crash and that gasoline was going to be $9 a gallon or more. Since that never happen, the Chaplin next told listeners that Congress bought Americans two more years using a two trillion dollar story line.

    Nothing happened two years later, and so Lindsey told listeners the dollar was going to be dead by 2012 and would only have a small fraction of the purchasing power it did have….Nothing happen by 2012 and so the story changed so that it was to happen by the end of 2012.

    Despite his age being in the 70’s, Lindsey is still continuing his propaganda campaign of the dollar is going to crash and now with judgments of God and such.

    As for our currency the dollar, I agree with Lindsey that the dollar will eventually be “devalued” in one way or another. But, how many more years and how much more money would a heavily invested investor have to loose first in the metals by "riding it on the downside before such an event actually happens? Is now the time to be "fully committed to the metals?"

  22. This comment has been removed by a blog administrator.

  23. To be exactly accurate about my position on Eur Usd,
    I started to sell 11 "units", my last third was 4 "units", and now I'm short once more but only 3 "units".
    I don't want to be totally out of my trade, given the very strong bearish trend, but I still expect Eur Usd to bounce somehow on the 1.27 area towards 1.3150 area. If I'm wrong, I'll still make a little profit while we are headed towards 1.22.
    If Eur Usd bounces from here, it may provoke a boune as well in the gold market expressed in dollars. That's why I'm definitely not adding up to my short position at those prices (1220) and keep a close stop loss to my short position.

  24. If you want to find out what happened in the markets this is a great place to visit.
    If you have a view other than Dan's, he will mock you and say get lost.

    1. Actually, you only get told to get lost if you're an insulting twit, so keep that in mind. Also, we don't spend any time accusing people of being "trolls", which seems to be the main pastime on the PM sites.

    2. paper puppet;

      April 2011 - 156.18
      Sep 2014 - 34.79


      April 2011 - 12810.54
      Sep 2014 - 16975

      S&P 500:

      April 2011 - 1359.75
      Sep 2014 = 1976.00

      You seem to conveniently forget that the hysteria around gold peaked near the time the shares peaked. How many of the victims of the charlatans that invest the precious metals realm told their groupies to sell any of their mining shares when the technical price charts broke down and the chart pattern became decidedly bearish? The exact opposite was the case - gold fever reached an hysterical peak with wild price claims ($2500, $5000, $20,000, $50,000) for gold thrown about.

      Based on the emails I receive fairly regularly from some of these folks, very few, if any of them sold even one of their shares. They exchanged them for actual certficates in many cases or were convinced the end of the world was near, so they sold none of them.

      Thus, to arbritrarily pick a starting point of this year, deliberately ignoring the carnage of a collapse from 156 all the way to the current 35 or so is rather amusing, were it not so horrendous.

      So don't come over here singing the praises of a sector that has seen so many people destroyed financially and expect me to sit idly by as if you are some sort of damned investing genius. Do you takes us all for fools over here.

      Now, go and caress your mining shares and revel in your gains for 2014. Maybe that will make you feel better about a collapse of nearly 80% in three years.

    3. GOTS!

      They exchanged them for actual certficates in many cases or were convinced the end of the world was near, so they sold none of them.

      What a fraud that Jimmy Sinclair!

      And posting sheeppictures in june 2013 at the bottom I kid you not!

      Sickest joke if a human being i ever came across, that Jim Sinclier.

  25. If you have a view without solid argumentation, if it's just "I think", "I did", "I know" without reasoning and examples, one might as well go to the Café downstairs (ah, but I live in Paris, so let's say the Pub, or the Starbuck maybe) and talk about everything he "knows" with the local bartender.
    If you bring argumentation (a real one), Dan answers you with details most of the time.

    Maybe you should try?

  26. I have
    GDXJ is up 6% YTD.
    No response

    1. So? Your point is what? Are you asking some sort of question?

    2. So?
      If not instantly refuted it must be true?

      Yes there is the potential for profit by trading GDXJ. Potential for loss too. Suspect the current support is mostly bottom fishers. Could evaporate if gold loses this support level.

    3. Miners always move up or down before gold does.

    4. Always?
      That's way too positive a statement to stand up. Go back for the last 100 times gdxj went up and start documenting the gold correlation.
      First question. How much do "miners" have to go up to indicate a price increase in gold.

      Second question. Which miners are you counting?

      Third question. What about the others!?

      Fourth question. What is the coefficient of correlation?

      Fifth question. What is the average increase in gold on this signal?


      It's well known that there is a tendency for the miners GDX and/or GDXJ to lead gold. It's not 100% or "always" though or every technician in the world would be buying south seas islands.

    5. at least we have a debate now :)

  27. Looks like some of the Andrew Maguire Fan Club is starting to wake up and realize he's been stringing the rubes along the whole time regarding silver and empty vaults etc.

    The more gullible hucksters out there just lap up every dribble of UNPROVEABLE drama that some of these folks regurgitate over and over.
    Maybe Andrew Maguire should give an interview to some of his most ardent supporters/rubes?

    Oh I forgot, he won't even give them the time of day or the decency of a clarification in an interview on what he knows and why he's sitting on it.

    It's pretty telling when those who trumpet and post some type of dramatic insider info can't even secure a measly statement or short interview to confirm their allegations.
    A case of the big name shills avoiding the smaller shills because they don't want to further tarnish their reputations? A bit too late for all parties involved.

    Looks like the turnip truck just lost a few more riders as they start to abandon the driver of the truck.

  28. Again, for anyone whose willing to take their blinders off...do some of these articles look familiar?


    Just who exactly wrote some of these articles that someone else ripped off or used without any acknowledgement of the real author?

    Is it plagarism? Time to start asking some hard questions.

  29. I'll leave you guys alone. Don't want to rock your boat. I've done a lot of research on TA and came to the conclusion that you can't predict the future by looking at the past. That's why most TA methods fail. I agree that market sentiment is important but mostly at extremes. As for gold, most of the guys pushing the fear trade are also in the business of selling gold coins. I think the gold bugs see the lies, wars and corruption and figure gold is a security blanket. It might well be. Historically though a balanced portfolio is the best approach. I stand by my comments on FN. What I want to see from the TA and FN guys is a prediction page where trades and results are clearly documented by date. Simple task so why isn't it ever done. Think about that. Signing off.

    1. "What I want to see from the TA and FN guys is a prediction page where trades and results are clearly documented by date."

      Well that's exacly what I'm doing here, my friend.
      But prediction page? You mean forecasts? You mean you think T.A is mainly used to predict a direction or a future trend? Then, as most people, you don't understand the most important meaning of T.A : to detect entry points and exit points in a market. Then we don't care what the market will do, and we don't care where it will go. T.A is about finding an entry point with good probabilities of exiting with a profit vs being stopped out with a loss, with good conditions to put a stop loss at a decent level, and an exit point with a good risk/reward ratio.
      If you think T.A is about magically saying that gold will go up during 2 months and will hit this price at this time, you understood nothing about it.
      Sorry to be so peremptory, but I'm fed up to see people writing about T.A, who are besides a failure at using it, and who have simply no idea about what it really is and how it should be used.

  30. Great post and great comments Dan. There is more worthwhile insight on this one page than on a whole year of any 10 permagold/permadoom/permaconspiracy sites combined. Those sites stay in business only by shearing the sheep.

  31. They'll need a bigger turnip truck....

    Maguire tells KWN he expects a derivatives blowup in gold, silver by year-end

    In the second part of his new interview with King World News, London metals trader Andrew Maguire reports that the big bullion banks are unwinding their monetary metals positions on the Comex and that he expects a derivatives failure in the monetary metals by the end of the year. An excerpt from his interview is posted at the KWN blog here:

    Will there be a retraction or mea culpa when the derivatives panic doesn't pan out by years end? No way.

  32. Dan, thanks for your post about your long view of gold and the advice perma-bulls give. I was naive and got suckered into buy PM, with the thinking it was going to skyrocket. Just like you I now realize, I don't want my kids to live in that "time zone". Could a loaf of bread be $20, outrageous. When you asked how much money has been lost, I think of all the conversations I have had with my wife and saying I was sorry for losing so much of our retirement money, which as you said, will probably never be seen again, I do hope the market comes back some, I do, I hope to recover something from my stupidity.
    Thanks for offering your common sense to the mess I am in.

    1. Steve;

      I am sincerely and genuinely very saddened to hear about your losses. It is so very easy to be duped by sensationalism and fear as it does sell.

      The thing about it is that I also once believed that we were going to see the US Dollar negatively impacted by round after round of QE. However, once the charts broke down, with the entirety of the commodity complex sinking lower and the US Dollar moving higher, we had to respond to what those charts were saying, namely,that the thinking of the market in that regard had changed and thus money flows were going to change as well.

      That is why I am trying to do over here - help people learn how to read the markets and thus protect themselves from the hucksters and frauds out there and hopefully make some decisions that will at least prevent them from getting hurt by them.

      Best wishes to you...

    2. Thank you for your words and care....

  33. Ags Bottom Line: A slight short-covering bounce ahead of tomorrow’s reports looks warranted as harvest should be impacted this week with wet weather.

    buh buh buh Bonds... bad to the bone! (geo thorogood) ...nice for the usa to see bond yields down, that could get the mortgage and housing market moving again!


  34. Unfortunately SP500 still in a bull territory. It could make a all time high this week. So no way for Gold being up except for a small bounce ahead

  35. A new sales record for August waterproof bib sales to my largest account, the donkeys at KWN. The funny thing is that they don't even recognize the fact that they are looking to lose. Laughter is the best medicine for sure.

  36. Excellent write-up Dan. Look out g&s...jobs report on Friday...perhaps a classic smash is in order...

  37. GoPro IPO now up from $28 to a record high of $85 today

    Investors are still interested in growth and innovation during a booming economy.

    Nobody is interested in the "gloom and doom" theory anymore.

    Notice how today's dip in stocks was bought with the utmost urgency, as so many are still sitting on the sidelines that missed the party.

  38. So,
    - Fibonacci ratios are totally useless.
    - T.A is totally useless because it is useless to watch the past to forecast the future.

    Here is a chart of EUR USD.
    Fibonacci retracements of the fall from 1.50 to 1.20 are on the chart.
    I don't know about you, but they helped me get out / get in on the way up.
    Of course, any bounces, up or down, indicated in the red circles right on the fibonacci levels are purely coincidental, because, you know, fibonacci retracements are useless.
    what can I do except laugh?


    1. You people criticizing T.A are bringing your assumptions without any solid example or proof, like a drunk guy talking his lot to a bartender.
      Your only argumentation is : "I".
      I am a great trader, I made a fortune lately, I am a veteran of the market, I know better than you guys,...

      Good luck and please leave this blog alone.

  39. NDX wowo the power of the 50-DMA touch! . INDU also had low o day about 50-day.

    wowo anybody want to trade livestock?

    The Fed will end its third QE program in October 2014, bringing us to the new
    era of policy normalization. The Fed’s 4.5 billion dollar balance sheet will start contracting. Although the timing remains uncertain, the first Fed hike is estimated by the second half of 2015. From a technical perspective, the Fed ormalization could stimulate normalization in gold markets and possibly shift the gold levels
    toward $680-1000 (2008-2009 trading band) should the critical $1,150-80
    support breaks. This said, markets are not pricing in the coming ECB expansion yet. Should the ECB liquidity partially counter-balance the Fed tightening, the normalization in gold markets will certainly be delayed.

    cheerio pip pip!

  40. Dan. First let me thank you for a detailed and reasoned assessment (as always). If you don't recall I am mildly bullish on Gold long term but I stop by here periodically to get a healthy balance to the excessive optimism of the gold bull sites that I also read (for entertainment!)

    I do not fundamentally disagree with anything you say, and on balance I would put you in with a handful of folks I read who are "righter than most".

    Here's my problem though. I am long since out of equities (from Dec '13) and have capital to invest. Ben Graham is a role model for me and I'm a fundamentalist - can dig into company accounts and tend to have a feel for valuation. But what's an "investor" to do in the current market? It's all so friggin distorted.

    I do not like bonds - IMO the HY end of this market is an accident waiting to happen. You can bid bonds up chasing yield all you like but ultimately there is a reason they should be HY and the inevitable defaults won't go away - they will happen in time. (Junk corporates, auto loans, student debt and some real estate are all ticking bombs).

    I do not like equities - I cannot find value in any major Western market. Valuations are excessive relative both to artificially inflated cashflows and to asset values.

    Property valuations vary by market but broadly is richly valued relative to actual incomes (which are flat to down).

    Exchange rates are skewed by distorted interest rates. Central Bank injections basically mean we have a musical chairs race ofe devaluation. Holding almost any currency long term at the moment is effectively a loss.

    So what's a guy to do? Almost every liquid investment class is currently overpriced (or has excessive risk). In that environment precious metals (mainly gold and possibly silver) strike me as one of the few things you can presently buy which aren't wildly overpriced. (You may have to wait a long time to realise gains, but buying any commodity at close to its cost of production, which is arguably where we are with G&S, is rarely a stupid move).

    In that context I cannot disagree with anything you say, but I simply cannot see any alternatives here to buying Gold (and Silver). I have bought the dips of the last 6 months, and I have been finalizing my buys in the last few days. I have been buying in GBP and my average position is a little underwater (3%-4%). This G&S market is HORRIBLY unloved and you make a very good case for why it deserves to be. I fear I will be burned over the coming months, but WHAT'S A FUNDAMENTALIST TO DO? I simply cannot see any alternatives (and would appreciate any bright ideas from the brains trust here! LOL).


    1. - being out of the markets is also a trading position.
      - SP500 is showing a clear upwards channel on the 2 week timeframe. Why not buy when it comes close to the support, with a close stop loss nearby? (though it's getting dangerous as long as the top of the other slower channel is not broken, now near 2030, as we are forming a rising wedge)
      - if your choice is really G&S, at least wait for them to stop falling. Are a few days going to change something? You would buy G&S a bit higher than a short term bottom, but at least you'd have a chance to see a bottom, and put a stop loss close to your buying price. How do you define the bottom for G&S, even short term, right now? Prices keep falling by the day. Silver is once more sub 17.50 today. Why are so many people so impatient to get back into the market if it only means losing their money? Out of the market is also a trading position.

    2. Mark H.

      Thanks for a set of very sound and reasoned comments.
      It is a real pleasure to read something which makes a good case for buying the precious metals without resorting to insults and abuse! :o)

      I understand your thinking as I am also a fundamentalist at heart. I do not like to trade any market that I feel I do not have a decent grasp on the fundamentals behind why it is doing what it is doing. That is one of the reasons why I have come to loathe computerized buying and selling because those damned machines and those who follow them are mindless in my view.
      Back when I cut my teeth trading, we were all fundamentalists who used TA to supplement that.

      Nowadays, most of the hedge fund types could care less about fundamentals. All they are interested in is price momentum.

      Trading therefore has to take into account the new era in the markets but I do think investors can still be good students of the fundamentals and come out ahead IN the LONG RUN.

      In the current environment, big investors are chasing YIELD, wherever and whenever they can find it. That means that they will essentially buy anything moving higher. In a sense then any investor has to take their actions into consideration when buying into a particular asset class. If they are absent from that class, price could linger going no where for a long time. If they are involved in that asset class, try keeping up with them because the way they blindly buy, waiting for pull backs may also be a long time in coming!

      When it comes to my investments therefore, I like to think long term, macro sort of stuff and then find companies which are well positioned to take advantage of what I see as a longer term trend. Once you settle on that, you can then take a position and add to it on price setbacks. You monitor the price chart and if a support level on a LONG TERM or on an intermediate term chart is taken out, you then evaluate whether or not you want to stay with that company or get out and look for another candidate.
      I personally do not like Warren Buffett because he hangs out with Obama which I cannot understand but he is a guy that looks for value in asset classes where he sees long term growth opportunity or potential.

      One thing that one can do is to actually HEDGE their stock portfolio by using the emini futures or the emini nasdaq or the Russell 2000. You have a position and then if it looks as if the market is going to enter a bear market, you can take a short position in the futures markets and use that as a hedge to keep your losses to a minimum in the portfolio. It is not perfect but it is why the emini futures came into being in the first place - it was meant to be a tool for investors seeking portfolio protection.

      Long term I still like energy - it is hard to see the world needing less of the stuff as we move forward although you have to stay up on this sector because of the potential for changes in the supply side of the equation due to advancements in technology.

      On the tech front, there are a lot of potential winners in there as well.

      Use the various ETF's out there as there is practically one for any sector you can think of. That will give you some broad exposure if you are not an individual stock picker. Also, you can use the futures to hedge those in the event of a downturn in the market.

      Holding gold is also a good idea but just remember, a little goes a long way. Don't get too crazy about the stuff and tie up so much capital in it that you have nothing left over for growth stocks.

      We'll let the other guys who post here chime in because they always have some great ideas.

    3. Right we all bought miners only in 2011 and held on Til now. Ok

      I'm asking a question to somebody that supposedly know something about markets
      Yet cant come up with an answer why GDXJ is still outperforming stocks YTD.

      Why is that??

    4. Mr. Puppet;

      I noted the price action since 2011 because you gold cult members always seem to somehow overlook the 80% collapse in the junior miners while trumpeting how well they are doing this year. It is an absurd comparison.

      But for the record I have no idea why you keep singing the praises of the junior miners as if they are somehow beating the broader market.

      The S&P 500 is up over 7% from the beginning of this year. The GDXJ is up about 11% since the start of the year. But why in the world are you choosing that as a measure of success in the shares? How many people do you personally know who were sitting OUT OF THE GOLD SHARES completely and in cash at the beginning of the year and then bought the GDXJ?

      I personally know of none. What I do know is that a whole lot of people ( people from whom I have received emails) bought gold shares back in 2011, more in 2012, more in 2013, etc) and never once sold any of them. They are seriously underwater and will probably never recover from those losses in their lifetimes unless there are quite young and have long years ahead of them.

      Even if you want to go back to late 2009, the inception of the GDXJ index, it traded at 94.74 at the close in November. It closed at 34.65 today. That is five years later and it has LOST 60 points or 63% of its value over that time frame.

      Who the hell cares that it managed to put on a lousy 3 points up to this point of the current year? Answer - only a fanatic and a member of the gold cult who refuses to see how abysmal the performance of this sector has been the last 5 years. Compare that to the S&P 500 and then tell me how much you love the junior miners.

      Get a grip on reality and take off the rose-colored glasses. There have been and remain opportunities in other sectors/asset classes that can be found by those willing to do their homework.

    5. So PM to you is overvalued today??

    6. This comment has been removed by a blog administrator.

    7. Paper puppet, what is your formula to estimate the right valuation of gold and silver today?

    8. Cant speak for the whole sector but Sinclairs TRX is over valued by two dollar considering its got no economic resources does not produce management lies about its achievements and prospects and will run out of money in months..

    9. This comment has been removed by a blog administrator.

    10. Puppet...it's pretty obvious you're here to derail and bait people as you've just admitted to it.

      You can bait some folks but you can't bait a fisherman. };^)

    11. This comment has been removed by a blog administrator.

  41. Hubert & Dan - Thank you for your detailed thoughts.

    Hubert - yes being out of the market is a position, but you have to look at "cash" on its fundamentals too. Since I do not live in a US$ domain (GBP) I am perhaps more sensitive to how much of a "store of value" a currency is. At the moment the US$ is appreciating, and the GBP is going down relative to it. Maybe I should (for a while at least) move funds into US$? lol Ironically, G&S have roughly a -0.5 correlation with US$ (if the $ goes up 10% then G&S go down by 5% in $). If my own currency is down 10% relative to the $ up 10% then my G&S goes up by 5% in my currency! Not all the world is looking at G&S movements in quite the same way as the US.

    Dan - I am not a trader. Whilst I can read certain aspects of charts I don't have the skills/traits needed to make money that way. Furthermore I agree with your observation that the environment of the last few years (whether due to low interest rates or machine trading) is perhaps one of the most hostile environment in history for anyone who is a fundamentalist become trader.

    I agree with you about energy - something we cannot do without! Furthermore, it seems likely that the oil price declines will create some value somewhere sooner or later so I probably need to investigate that further. In that respect I was actually looking at Gazprom the other day, but the current Ruble weakness makes me wary of it for now!

    It also sounds like I should investigate the emini futures! The downside of that is that if you are using them as a hedge then you probably need something to hedge against and I have virtually no equities at the moment - and am NOT going near them at these levels! LOL

    Anyway, thx again for your thoughts.


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