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Showing posts with label pullback. Show all posts
Showing posts with label pullback. Show all posts

Saturday, October 8, 2016

Both foreign buyers and bank analysts see recent price declines in gold a fantastic buying opportunity

With gold prices falling below $1300 per ounce for the first time since July this week, many mainstream analysts who hate the monetary metal jumped on the bandwagon to say the Gold Bull Run was over, and to expect prices to decline much more than where they closed out the week.  However, this analysis is not proving itself out in the physical market where buyers of both gold and silver are using this pullback as a great buying opportunity.

In fact, several gold and silver businesses saw single day sales of several million dollars, with the U.S. Mint selling at least 1.4 million coins to dealers this week alone.

How fast things can change in the PHYSICAL markets when paper prices are smashed.
Gold Eagles, Gold Maples, Krugerrands, Phils, and even private mint 1 oz gold bars are now ALL on 1-2 week delays at the wholesale level in the US after this week’s massive rush to physical. 
Same Story In Silver: 
Wholesale premiums jumped .30 - .50 on 90% Junk Silver Coins this week, with similar increases passed on at the retail level. - Silver Doctors
Reports on tremendous buying of physical gold this week were not limited to bullion dealers as analysts from both Goldman Sachs and Merrill Lynch agreed that the recent pullback of nearly $100 will quickly be filled by foreign buyers in both China and India, as well as those who continue to see financial conditions deteriorate.
Investors should use the recent drop in gold prices as a buying opportunity, as increased volatility in the market ahead of a potential Fed interest rate hike could lead investors to seek refuge in the precious metal, according to Francisco Blanch, head of global commodities and derivatives research at Bank of America Merrill Lynch. 
"Gold is really thriving on uncertainty, and frankly, on the end of the U.S. [rate] cycle whenever that happens," said Blanch. 
The commodities expert believes that once the U.S. central bank decides to raise interest rates, potentially causing equities to sell off and the dollar to rally, investors will see gold prices stabilize and eventually trend higher. - CNBC
As you can see from the chart below, immediately following the 2008 financial crisis gold prices fell from over $1000 per ounce down to $740, only to begin their next leg up to over $1900.

Don't let the pullbacks in gold be a deterrent to sell, as the long term trends of a gold bull market, as well as financial instability, have not changed in a week's time.  And instead look at this pullback as a buying opportunity, just as it was in 2009 before the central banks began their six year programs of zero interest rates and quantitative easing.

Saturday, May 28, 2016

Well respected London metals analyst says to ignore recent pull backs as gold consolidating for next run to $1400

The drop in gold prices over the past two weeks has had little to do with interest in the actual metal and more to do with the U.S. central bank having to implement desperate measures to protect the currency from falling below 92 on the index.  In fact, it was nearly unprecedented what regional Fed Presidents did last week by having four of them publicly attempt to promote a rate hike in June that may or many not actually occur.

As we learned a month ago from regulators investigating Deutsche Bank, manipulation of gold prices is a real thing and has been going on constantly since 2011 when the price reached an all-time high of $1940 per ounce.  And the dichotomy of course is that while interest and purchasing of both paper and physical gold is at their own all-time highs, the price continues to fall, meaning that the central banks know what would happen should investors wake up to the fact that the economy is not in as good of shape as they have been attempting to portray.

So with this in mind, and the fact that despite a pullback of the gold price from just under $1300 to where it sits now at $1213, remember that we are still up 16% from the beginning of the year, and that manipulation during a time of heightened buying will only mean an explosion in price when even the slightest bit of tension is relieved.

And this is what well respected London metals analyst Andrew Maguire sees also as he looks towards the next leg up which will be around $1400 per ounce.

Andrew Maguire:  “Whenever we see such a synthetic divergence develop between the wholesale physical markets and the paper-centric non-delivery markets, it allows the commercials (and central planners), who have exposure to the physical markets, to not only take the short side of these naked longs, but to do so with impunity… 
Andrew Maguire continues:  “Bear in mind that the bulk of these naked short commercial positions were only able to be added above rising aggregated physical interest levels, but exponentially larger in defense of the Rubicon line at $1,308, a breach of which would threaten what is known as a ‘commercial signal failure.’ We came close to triggering this commercial signal failure but without the close proximity of an underpinning physical market, a short term price gap had been opened which was easy for commercials to fill on the downside. 
That is exactly what we have just witnessed — a price gap that closed on the downside, and as is par for the course, we now have the same hot money rinsed and wrong-footed, which is the polar inverse situation of what was occurring near $1,300. The hot money is now overshooting to the downside while the commercials are profitably covering all the naked shorts they added. Commercials are also going long to hedge physical exposure at these levels. This action is no more than healthy backfilling with a fresh, higher stair step being cemented for a sustainable move into and eventually through the $1,300’s.” - King World News

Wednesday, May 11, 2016

Despite recent pullback and consolidation, J.P. Morgan and Hedge Fund Manager validate gold bull market

Ever since gold briefly crossed $1300 per ounce last week, the price of the precious metal has fallen due to profit taking, and a massive effort by the central banks to suppress the price through shorting the market with near record naked contracts.  But this has only led to a consolidating of the market around $1250, and a removal of most weak hand investors during the last run-up.

And it is because of the strength of this consolidation that on May 11, a well known hedge fund manager along with bullion bank J.P. Morgan both announced validation that gold is well into, and definitely in the next Bull Market.

Billionaire hedge fund manager Paul Singer said that gold’s best quarter in 30 years is probably just the beginning of a rebound as global investors -- including Stan Druckenmiller -- weigh the ramifications of unprecedented monetary easing on inflation. 
“It makes a great deal of sense to own gold. Other investors may be finally starting to agree,” Singer wrote in an April 28 letter to clients. “Investors have increasingly started processing the fact that the world’s central bankers are completely focused on debasing their currencies.” - Billionaire Paul Singer, Bloomberg
And J.P. Morgan's assessment...
Gold prices are surging this year, and that has one of Wall Street's largest banks flocking to the yellow metal. 
"We're recommending our clients to position for a new and very long bull market for gold," JPMorgan Private Bank's Solita Marcelli said Tuesday on CNBC's "Futures Now." After seeing three back-to-back years of losses, the precious metal has rallied 20 percent in 2016. And that's just the start of the next leg higher, according to Marcelli. "$1,400 is very much in the cards this year." - CNBC

Tuesday, January 10, 2012

Gold enjoys rebound from 200 DMA support level

Gold is up over $25.00 this morning on stronger commodity news, and a strengthening Euro.  The yellow metal rebounded back over the 200 DMA support level and appears to be consolidating for the next run after a 30% pullback.

Remember when various economics professors and self-anointed Ph.D'ed market timers said to sell everything because the gold 200 DMA had been breached to the downside, never to be crossed back again, to which our simple retort was, "Many are doing their damnedest Ph.D.-best to somehow fuse economic theory and technical charting, and state that a breach of the 200 DMA in gold is indicative of imminent price collapse.
So much for technicals. Sure enough: less than a month later, and $100 higher, gold is right back above the 200 DMA. Oh, and we expect to hear nothing from said academics for a long time. - Zerohedge

Chart courtesy of Zerohedge

When it comes to gold and silver, there are a few names (Bob Chapman, Eric Sprott, etc...) that are worth listening to.  Everyone else... hasn't a clue to be found in their baskets of BS.

Wednesday, January 4, 2012

Pullbacks appear done as gold begins moves back up in 2012

With two straight days of positive moves, gold appears to have reached the end of its pullback from the $1700's, and may be headed towards stronger highs.  2012 gold prices have been predicted by several banks this year, with estimates ranging from $1830 to over $2000 an ounce.

See bank estimates for gold in 2012.

Wondering why gold has moved by over $20 in the last few minues? Wonder no more - according to a note just released by Citi analyst Tom Fitzpatrick, the gold correction "has run its course and a rally is now back on the cards." Granted it is not all smooth sailing - "Gold may drop to $1,550 before turning", but when the turn comes, Fitzpatrick sees it as going all the way up to $2,400. He has the following technical observations: "Only a weekly close below $1,535/oz means corrections may be deeper." - Zerohedge

Chart courtesy of Citi