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Precious Metals
Snippet from March 15. 2018 Pivotal Events
Last week, we outlined that reckless central banking was not driving gold and silver to levels that supply/demand research would suggest. That was the old recipe. Now which is wrong, gold not going up, or fundamental research?
Gold’s real price typically declines during a financial mania, which has been the case. As deflated by the CPI, the real price fell in half from the peak in 2011. That was to the end of 2016. Some of that time has been building a base for the launch when speculation infinancial assets finally exhausts itself. It has increased from 4.69 in early 2017 to 6.36 and since September has been staying above the 20-Week ema. This is constructive as a rising real price improves margins for the gold miners.
Our “Comfort” indicator for investing in equities is HUI/Gold and it firmed up in January and failed. It has been trading below the 20-Week ema since. On the longer-term this seems to be back to base-building. The last rally in this item became overbought in June 2016 and we have been cautious since.
Gold and silver stocks will be vulnerable to a decline in the general stock market after mid-year.
Snippet from March 15. 2018 Pivotal Events
Last week, we outlined that reckless central banking was not driving gold and silver to levels that supply/demand research would suggest. That was the old recipe. Now which is wrong, gold not going up, or fundamental research?
Gold’s real price typically declines during a financial mania, which has been the case. As deflated by the CPI, the real price fell in half from the peak in 2011. That was to the end of 2016. Some of that time has been building a base for the launch when speculation infinancial assets finally exhausts itself. It has increased from 4.69 in early 2017 to 6.36 and since September has been staying above the 20-Week ema. This is constructive as a rising real price improves margins for the gold miners.
Our “Comfort” indicator for investing in equities is HUI/Gold and it firmed up in January and failed. It has been trading below the 20-Week ema since. On the longer-term this seems to be back to base-building. The last rally in this item became overbought in June 2016 and we have been cautious since.
Gold and silver stocks will be vulnerable to a decline in the general stock market after mid-year.
 CLICK CHART TO ENLARGE | Since early 2017, the gold/silver ratio has been trending up. That’s from the 65 level to this year’s high at 83 in January. |
Breaking above this would indicate that the credit markets are changing to adversity.
The gold/silver ratio always goes up during a contraction.
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The gold/silver ratio always goes up during a contraction.
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