OLYMPUS DIGITAL CAMERAIf you were to base your decision-making on news alone, one is not making any money from buying gold.  Does that mean one should refrain from buying it?  The best answer comes from knowing your objectives.
If you want security from the out-of-control fiat spending of all Western governments, then yes, this continues to be the time to buy gold, [and silver].  In addition to the insane and unprecedented creation of “money out of thin air,” world-wide events are turning darker and darker.  Gold and silver remain one of the best means for attaining financial peace of mind, and one of the best forms of wealth preservation.  In this regard, price is of no consequenceOwnership is.  
Stay the course.


Submitted by ETP:

You would think that how the fundamentals have been so misleading to so many in the
PMs community, that more would pay attention to what the market says and less to what
others have to say about the markets.  It is like building a better mousetrap and expecting
people to come flocking to buy it, which they do not.  Why not?  Creatures of habit may be
the simplest answer.

We see charts as the “improved mousetrap,” as it were, and superior as a tool for market
timing over fundamentals, or any other similar undertaking, for relating to what and when
to buy in the markets.  Still, there are not that many converts who pay more attention to
what the market is saying.  The one thing we know for sure is, regardless of whatever one
has in the form of expectations, they are always subordinate to the final arbiter over price,
and that is the market itself.

We make such a distinction on the daily silver chart, at the end.  For now, here is our
ongoing read of developing market activity for gold and silver:

For months, we have been saying that the gold charts are not indicating a wild or even
a sustained move higher.  To the contrary, despite all the positive fundamentals for
demand, on so many levels, price is marching to a different tune, far removed from all
the known and highly constructive  news about gold.

If you were to base your decision-making on news alone, one is not making any money
from buying gold.  Does that mean one should refrain from buying it?  The best answer
comes from knowing your objectives.

If you want security from the out-of-control fiat spending of all Western governments,
then yes, this continues to be the time to buy gold, [and silver].  In addition to the
insane and unprecedented creation of “money out of thin air,” world-wide events are
turning darker and darker.  Gold and silver remain one of the best means for attaining
financial peace of mind, and one of the best forms of wealth preservation.  In this
regard, price is of no consequence.  Ownership is.  Stay the course.

There is ample evidence that your own government sees any money you hold in banks
as theirs for the taking, [Cyprus, Greece, Ireland].  Rules, laws, statutes are already in
place to have your funds confiscated, if you [wrongly] believe that it cannot happen to
you.  Both in the US and UK, at a minimum, there have been several published stories
about people’s safety deposit boxes raided for their gold and silver contents.

If you do not want to be subjected to what is going on, and will surely only get worse and
more widespread, than yes, buying gold and silver makes sense, not to make money, as
an incorrect measure in the short-term, but to be safe and secure in protecting what you
already have from being confiscated, in some manner.  Obviously, owning and holding
PMs means you do not keep it in some bank or [not so] safe deposit box.

If you want to be profiting from owning gold, [and silver], then no, now is not the time
to be committing to the long side, in general.  That is more of a function of trading, and
futures and options are the typical choices.  We do not trade options, so they are never a
topic of the charts we discuss.

The best we can say about gold is that it may be transitioning from its protracted down
trend.  The signs that gold remains under pressure are still there, bearish spacing, lower
swing highs, etc, and that means any buying has to be very select, or not at all, again,
profit being the only objective.

The chart comments are apt, and we will add that in addition to the high volume from
four weeks ago, the very small range bar, at the low, supports the prospects that the
bottoming process continues with increasing positive signs.   That can change next week,
if the market were to  make lower lows, but unless and until that kind of event happens,
we can only draw conclusions from facts that are known, and not from what may or may
not happen.

 

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GC W 19 Apr 14

For whatever reason that it happened, last week’s wide range bar down on sharply higher
volume may contain price activity for the next several TDs, [Trading Days].  Look at the
wide range bar lower, at the beginning of April, in the weekly chart above.  It captured
price within its range  for the next 7 trading weeks.   Then, at the end of April, same chart,
there were two large bars down, and with the exception of a brief rally above the first of
those two bars, price has been trading with their range for the past year!

Because price closed well off the low of last Tuesday’s sell-off, the sharply higher volume,
and price at important support, tells us buyers are defending the 1280 +/- area as support.

GC D 19 Apr 14

Silver keeps trying.  It is like the Little Engine That Could:  “I think I can, I think I can…”
One day, now sooner than later, it will move higher and get over the hill.  As you view the
daily chart, you can see price moving farther and farther along the RHS, [Right Hand Side]
of the ongoing TR, [Trading Range].  The farther along price moves on the RHS, the closer
it gets to reaching a final resolve, or a breaking free of the TR.  That it is occurring at such
a low-level, and at important support, an upside breakout is more likely.  However, it is
still possible for one more move lower to totally wash out weak hands and trigger sell
stops, at the same time.

SI W 19 Apr 14

Combined with comments on the weekly TR, you can see that silver just had a break to
the downside of its recent little TR.  We see it as a positive development because of how
it happened: wide range, highest contract volume, close off the low, and no downside
follow-through for next two TDs.

Forget about your own expectations for higher prices, at least in the sense of wanting
higher prices as soon as possible.   It is the market that determines where price trades and
for how long.  Higher prices are coming!   This is where all the developing fundamentals
are put into a context, but the timing for when price will justify the fundamental
expectations is determined by market activity.   That activity, as just described, and as
we have been saying for over a year, is saying, quite clearly, neither silver nor gold are
showing evidence of an imminent move higher.

Adjust your expectations to what the market is saying, and you will lower your anxiety
level for disappointment and align yourself for what is.  The definitions of is is that which
is going on, right now, and not what is in your own mind, re gold and silver.

SI D 19 Apr 14


  1. Since selling now would be absolutely idiotic and sadomasochistic, and since the wizened old geezers of investing say to, “buy when there’s blood in the streets”, then we have no real choice.  The bankers need to learn that we won’t ever give up, we can’t. They removed the escape hatch two years ago, and it’s still missing. Good job, bankster pukes.
     

    • I concur, buying is the only smart response to the crushing of the paper prices. It’s obvious that only Americans are not buying metals so us stackers have to take up the slack and it’s what the cartel hates most.

  2. In his latest update our friend Brother John is now calling for a potential $15 handle in silver based on his charts. Well being that he has been dead wrong for the past three years along with the rest of the gurus out there in terms of calling price action I suspect he will be wrong once again. Having said that, I have nothing against Brother John and I actually respect the fact that he is brave enough to stick his neck out there and call price targets. I would not be shocked to see $15 paper silver and $1100 paper gold this summer but even then you will still be paying around $20 and $1200 for the real stuff. 

  3. The paper mongers have shown that they can slam gold and silver prices any time they want.  What they cannot do, however, is provide gold or silver to people at their slammed down prices.  Remember, folks, they are not about delivering metals, they are about naked shorting them.
     
    But then, those of us who have been into PMs for a while are WELL aware that holding these metals is not about making money or trading them.  It is about HAVING them when the musical chairs music stops.  That will be critically important when many people are running around with no money that anyone actually wants while others are unwilling to give up that which sustains life in exchange for little green paper coupons with zero intrinsic value.  For now, those little green slips of paper have some value.  That is not the argument and never has been.  What IS the argument is whether or not they will retain that value over time and especially during a crisis.  Inflation over time indicates that they will not, as value is continuously leaking out of our currency like air from an old tire.
     
    I have a good supply of food in our basement and in our freezer.  This is not earning me any money either because I am not in the business of selling it.  It was bought so that we could stock up on food during various sales and consume it at our leisure over time.  With food prices rising at a steady rate, replacement food costs more than what we paid.  In some cases, quite a bit more.  While this saves us some money it doesn’t EARN us any.  That’s OK, though, because that is not its purpose.  It’s the same with silver and gold.  They are life-sustaining in times of crisis… and for that reason alone are well worth buying and holding, IMO.  This IS a personal choice, however, and others are completely free to own or not own a good supply of either PMs or food.  Make the choice in this that best fits your life and thoughts on these issues.  But be fully prepared to live with your choices, however, as you WILL be held to them.  The times in which we all live will see to that.
     

    • You make some very good points @Ed_b . What we must all remember is that we live in an “instant gratification” generation where everybody wants what their neighbor has and they want it now. This is how bubbles get formed, the lemmings all gravitate to the latest investment opportunity where they see everyone else making so much money. I know a few people that got sucked into the housing bubble scheme of “flipping” houses. Sure they did fine at first but when the music stopped and they were left holding several properties that were rapidly declining in value they lost their shirts. The current bubble in stocks is going to claim another round of victims. Margin borrowing levels are at all time highs; this cannot possibly end well.
       
      The only people buying PM’s right now are the folks that can actually see what’s going on behind the curtain. The lemmings will not start buying silver until they see it going up 5% a day. The vast majority of them will be late to the party, those of us here are already light years ahead of them. This is not about making a quick profit but about protecting your purchasing power and preserving you and your family’s wealth outside of the criminally corrupt banking system.
       
      Silver at current levels is a screaming buy but find me one person on Wall Street suggesting to their clients that now is the time to buy. They are most likely suggesting Facebook or Priceline stock instead.  

    • @gogetter1132
       
      Thanks, GG.  I appreciate your comments as well.  Your point about margin debt is particularly telling.  I had not looked into that but it makes perfect sense.  People are leveraging up at a time when earnings seem to be peaking.  That is definitely not a good combo for stock prices.  In fact, that’s what markets tend to look like just before a substantial pull-back.  I found a good article on this on the web at:
       

      http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php

       
      There are some very interesting charts on this page.  While it is difficult to use charts as predictors of the future, it is interesting to see what they are showing us about the past and the present.  Market patterns do exist and they do repeat to some extent.  Human behavior doesn’t change all that much with time and it strongly influences what the markets will do.
       
      “What we must all remember is that we live in an “instant gratification” generation where everybody wants what their neighbor has and they want it now.”
       
      Yes, I can see that… but it is difficult for me to think that way because it is quite foreign to the way that I was raised.  My parents and grandparents were people of the Great Depression / World War II era.  Both of those were powerful events that shaped them and their ideas.  I was raised to have a great respect for money and saving because an uncertain future can and will devastate us financially.  Hunger and poverty were things that my family knew all too well.  They are not something that any of us wants to repeat.  Even though I got these lessons 2nd and even 3rd hand, they made a strong impression on me.  I am not part of the instant gratification crowd and never will be.  I have tried to teach my kids and grand kids that hard work, saving, and planning for a solid financial future is the way to go and that instant gratification is the financial equivalent of a sugar-high from junk-food when what we really need is a good solid well-balanced meal.  I know that the instant gratification crowd is out there and that their behavior can have considerable effects in the market.  In fact, I sometimes count on that kind of behavior when investing.  My job is to make money.  Their job is to provide it.  
      ;-)
       
      Yes, the real estate bubble was an obvious one based on historical valuations and the number of people who jumped into it.  When home prices in my local area passed $100 a sq. ft., I knew that something was wrong in this market.  That was a lot of money to spend on a house.  My wife and I have a large and lovely home on a hill with a nice view.  We bought it in 1994 and paid less than $58 a sq. foot for it.  When home prices reached the $150 a sq. ft. area, the housing bubble popped and a lot of people, such as your friends, got clobbered.  But that is the nature of speculation.  It is an activity that specializes in extremes, being VERY good or VERY bad at times.  Considering that homes are only very liquid in a hot bubble-like market but not at most other times, I declined to become involved in that.  I did put some money into a REIT mutual fund, though, that did very well.  It was sold off in mid-2007 at a very nice profit.
       
      “The lemmings will not start buying silver until they see it going up 5% a day. The vast majority of them will be late to the party.”

       
      Agreed.  This is what some call “the dumb money”.  It always seems to come in too late, stay too long, and then bail out at the bottom of the cycle.  I have seen this behavior repeated over and over again in the stock market.  People buy in near a market high, ride their investments to the bottom, and bail out just before things turn around.  This locks in their paper losses as REAL losses, they get mad at the market, and never ever venture back into it again.  This is unfortunate.  They are condemning themselves, in many cases, to a mediocre financial future.  
       
      I buy PMs in the same way that I buy stocks, mutual funds, and ETFs… slowly over time via dollar cost averaging.  This is how real wealth is created over time.  It’s not whiz-bang, it’s not sexy, it’s not fast, and it’s not glamorous.  It’s just plain hard work that is spread out over time.  But… it’s saving grace is that it works!
       
      “This is not about making a quick profit but about protecting your purchasing power and preserving you and your family’s wealth outside of the criminally corrupt banking system.”
       
      Amen to that, Bro.  These words should be printed, framed, and hung on a wall next to the computer of every person who buys PMs so that they do not forget why they got into PMs in the 1st place.  I could not agree more.
       
      “Silver at current levels is a screaming buy but find me one person on Wall Street suggesting to their clients that now is the time to buy. They are most likely suggesting Facebook or Priceline stock instead.”
       
      Absolutely.  But that is reasonable from their point of view.  Wall Street is ALL about commissions and bonuses.  When brokers sell shares of stock, mutual funds, ETFs, bonds, and other financial products they make money by doing it.  When their clients take money from their accounts to buy physical PMs, it goes against the grain of everything these people know and want.  They do not get any commission from those PMs.  In fact, they end up losing money under their management.  That makes their pie smaller and they earn less because of it.  It can cost them their bonus or a share of it and that is an unforgivable sin on Wall Street.  For all these reasons, brokers want nothing to do with PMs, even when stocks are doing poorly and PMs are rising strongly.  It’s not about the investment.  It’s ALL about the broker and what s/he can earn from the investment.  These are the anti-broker holdings in this world and they recoil from PMs as does a movie vampire shown a crucifix.  In fact, Bernanke once did exactly that when Ron Paul held up a silver round during the Fed chief’s testimony before congress.  Bernanke physically recoiled from it.  I could just imagine him hissing, baring his teeth, and lifting his cape up to shield himself from the pure and brilliant light reflecting from it as he spins away and scurries off into the safety of darkness.  lol
       
      Yes, silver IS a screaming buy these days and we should consider ourselves fortunate to be in on it at these prices.  It is entirely possible that these may be all time low prices that we will remember with great fondness one of these days… like many consider $2-4 silver and $35 gold today.  Others may disagree with this but that’s fine.  Time will be the arbiter of such disputes and it very much looks to me as if time in on the side of those who hold PMs in the right way and for the right reasons.
       

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