Watch the Gold / Yen Correlation

Posted on Posted in Articles

Both gold and Japanese yen have acted as the same asset class for practical purposes since 2011. However, early signals show gold beginning to outpace yen. Investors should not underestimate the impact that a more significant breakdown in this ratio will have on gold prices. We expect a major gold advance to coincide with a break of the lower boundary of the correlation.

Click here to continue reading for FREE on our partner site, Gold Eagle…

Gold Prices: Record-Breaking Volume

Posted on Posted in Articles

It is often said that in market analysis: “volume precedes price movement.”

Gold has just posted its highest quarterly volume of all-time for futures trading history, for the quarter ended September 30. The closing data shows that for the period, over 17.5 million contracts traded hands. This eclipsed the previous record volume by a whopping 3.5 million contracts. What’s more, the new record surpasses the number of contracts that were traded during the quarter in which gold made its all-time price high of $1,923 per ounce, which came in Q3 of 2011.

Something is happening here in the gold market, for those who would pay attention to the hints now presenting themselves.

Click here to continue reading for FREE on our partner site, Gold Eagle…

As Gold Breaks Out, Miners Remain Historically Undervalued

Posted on Posted in Articles

While ownership of physical gold should be the cornerstone of a precious metals portfolio, we are overweight the miners at this juncture. Despite gains of 100% – 500% in 2016, the gold mining sector is still historically undervalued relative to gold.

Throughout history, ratios between real asset classes revert to the mean when they become radically undervalued, and this time will prove no different. For those contrarian-minded investors who have a higher tolerance for reward and risk than the above targets for gold bullion alone would provide, the opportunities in the gold producing equities are quite significant.

Click here to continue reading for FREE on our partner site, Gold Eagle…

Gold Attempts Breakout… Yet Miners Still Signal Caution

Posted on Posted in Articles

Since gold’s all-time high of $1,923 per ounce in September 2011, the nearly 6-year decline that this week has brought prices back to $1,270 has been broadly defined by a falling linear trend of selling pressure. This declining trend is being tested immediately, and a breakout higher would be a major signal that gold’s period of falling prices has come to an end. However, caution is warranted as leading indicators are still flashing warning signals for precious metals prices.

Click here to continue reading for FREE on our partner site, Gold Eagle…

US Dollar and Gold Positively Correlated — Down

Posted on Posted in Articles

Unfortunately for gold, we are living through one of those anomalous time periods in which the US dollar and precious metals are positively correlated – but to the downside.

Throughout history, gold tends to have its strongest moves when the US dollar is losing value, as gold receives bids from those looking to protect their savings against a decline in the world’s reserve currency.

However, as we can see at right, especially since the Federal Reserve meeting in mid-June, both the US dollar and gold have moved in the same direction: lower.

Click here to continue reading for FREE on our partner site, Gold Eagle…

Gold Forecast: Caution Advised After Fed Meeting

Posted on Posted in Articles

On the heels of the Federal Reserve’s most recent ¼ point interest rate hike on Wednesday, gold and the precious metals complex have seen a negative bearish reversal that deserves caution over the short and intermediate term.

Fundamentally, the interest rate hike and accompanying policy statement, which indicated that the Fed would begin to taper down its balance sheet over the coming year, was interpreted by the market as supportive for the US dollar and negative for gold. As precious metals investors, we know that the Fed has already printed nearly $4 trillion dollar of fresh liquidity in support of the financial system over the past decade, and that the feasibility of the central bank reducing this liquidity by any significant amount is doubtful. Yet what is important over the short run is not so much our fundamental beliefs – but rather how the market itself is reacting.

For example, those who ignored the actual response of the gold market in 2011 suffered severe losses as the precious metals declined through late 2015. All the while, the Fed continued to print money. The market can move contrary to perceived fundamentals for many years. Caution is again advised at this juncture.

Click HERE to continue reading the full article for FREE on our partner site, Gold Eagle…

 

Key Ratio Hints of Gold Price Breakout

Posted on Posted in Articles

Gold prices remain in a mid-cycle consolidation after the strong advance seen in first-half 2016. Seasonal influences are shaping up for strength by August and September. The gold to silver ratio looks to have topped, signifying an important low across the sector. Precious metals investors should continue to monitor the ratio as a leading indicator, which will give us hints as to the direction of gold’s pending breakout when it occurs later this year.

Click HERE to continue reading the full article for FREE on our partner site, Gold Eagle…