Gold’s worst year in memory was largely the result of extreme paper gold-ETF selling. A flood of gold supply hammered gold prices as stock investors around the world aggressively dumped gold ETFs. They were rotating out of gold to chase the Fed-driven stock-market levitations. But as toppy stock markets inevitably reverse, so will capital flows. Gold-ETF outflows are already waning, and will soon shift to accelerating inflows. [Read more...]
Lewis Carroll’s Alice in Wonderland is a timeless tale that chronicles the journey of a young girl into a psychedelic fantasy land. This tale is one that turns logic upside down, and takes us into a bizarre world that defies reality. To get to this world Alice falls down a precarious rabbit hole, perhaps the same one that has swallowed the junior gold stocks.
The juniors have seen so much carnage lately that investors have completely disregarded their sector. And this disregard has sent them down a proverbial rabbit hole, into a world that is bizarre and illogical to say the least. Though these stocks certainly don’t have much support with gold prices so weak lately, popular consensus that their sector is dead is pure fantasy. [Read more...]
Already beleaguered, gold suffered another sharp drop this week. When the minutes from the Federal Reserve’s latest policy meeting implied it might slow its QE3 bond-buying campaign “in coming months”, futures speculators responded with heavy selling. But their extreme gold bearishness is highly irrational, they are missing the forest for the trees. Taper or not, quantitative easing remains super-bullish for gold. [Read more...]
Heavy and relentless selling by American futures speculators has been one of the primary drivers of gold’s horrendous year. These traders abandoned gold on the long side while piling in on the short side, unleashing withering selling pressure. But just in recent weeks, these speculators have started buying gold-futures contracts again on the long side. This critical and long-awaited reversal is very bullish for gold. [Read more...]
Gold’s 2000s bull market has prompted the miners to scour the world over in search the Ancient Metal of Kings. And over the course of this bull, they’ve indeed reached far and wide to find their glory. Now rather than only a small handful of countries responsible for the lion’s share of production, mine supply is truly a global affair. [Read more...]
Silver has suffered a rough year, but its fortunes are changing. In recent months its price has firmed at the convergence of multiple major support zones, a powerful technical launchpad.
Silver has soared in parabolic up-legs from the handful of similar past convergences, a very bullish omen.
And with silver languishing so low in its trading range relative to gold, it has enormous potential to catapult far higher soon. [Read more...]
Gold miners’ stocks have been brutalized this year, leaving them bleeding in the gutter as the most hated sector in all the markets. Plunging prices always lead to fear and excessive bearishness, unsustainable anomalous extremes that investors desperately try to rationalize as righteous. Today the bears’ primary rationalization against gold miners is the notion they can’t earn any profits, which is a complete fallacy. [Read more...]
Gold stocks continue to be universally despised, plagued by extreme bearishness. This has hammered their stock prices to epically-undervalued levels that are truly fundamentally absurd. This whole sector is now trading as if the gold price was less than a third of current levels! This massive disconnect has created vast opportunities for brave contrarians who have forged the mettle to buy low when few others will. [Read more...]
Gold stocks are inarguably the most-hated stock sector on the planet these days. After they spent 2013’s first half plunging precipitously, investors have left them for dead. Even most former contrarians who earned vast profits in gold stocks over a decade have gone ostrich. This is a terrible mistake, as the best times to buy low are when sectors are universally loathed.
Peak bearishness occurs right before they soar. [Read more...]
The Federal Reserve shocked the financial world this week, defying universal expectations. It failed to start reducing the pace of its third quantitative-easing campaign’s debt monetizations, delaying the long-anticipated QE3 taper indefinitely.
This surprise ignited sharp moves in nearly all major markets, but gold’s was certainly the most impressive. It rocketed higher on the Fed’s startling new paradigm shift. [Read more...]
The Federal Reserve’s upcoming decision on whether to slow its third quantitative-easing campaign’s debt monetizations has to be this year’s most-highly-anticipated market event. Traders have been trying to game the odds of QE3 tapering literally all year long, driving some sharp market moves. So the Federal Open Market Committee’s decision due out next Wednesday is likely to be a major market-moving event.
The focus on this imminent FOMC meeting is so hyper-intense that its impact should be considerable no matter what the Fed decides. The QE3 taper (or lack thereof), its size, and what the FOMC implies for future tapering will almost certainly spark sharp price reactions in the bond markets, currency markets, stock markets, and precious metals. All have moved violently this year on mere QE3-taper anticipation. [Read more...]
Gold denominated in Indian rupees just skyrocketed up near record highs, a far cry from recent dollar-gold action. Much of this extraordinary rally was fueled by the near-collapse of the Indian currency to new record lows against the US dollar. India’s deepening currency crisis has major implications for domestic gold demand and thus global gold prices. Nothing ignites gold buying like a collapsing currency! [Read more...]
Gold’s precipitous decline in the first half of 2013 sent shock-waves throughout the entire mining industry. Its scary panic-induced 28% plunge over just six months has forced the miners to revisit their development plans.
Gold’s much-lower prices are also forcing the miners to take huge write-downs and impairment charges (some projects are no longer economically viable, and others must be re-valued to the market). In the second quarter alone major miners Barrick Gold, Newmont Mining, AngloGold Ashanti, Goldcorp, Newcrest Mining, and Kinross Gold announced over $23 billion in combined write-downs and impairments.
And this will no doubt have an adverse impact on global mine production in the years to come.
The US stock markets have enjoyed a dazzling year, levitating to a long series of new record highs. But this relentless advance has stalled in August, with selling pressure mounting. Even most of the bulls readily agree that a material selloff is overdue after such a mighty run.
But actually the odds are high this necessary retreat will extend well beyond normal pullbacks or even corrections into a new cyclical bear. [Read more...]
The flagship GLD gold ETF has suffered a radically unprecedented mass exodus this year. But just this week, money started flowing back into GLD for the first time in months. This likely marks the dawn of the GLD exodus’s reversal, which is wildly bullish for gold. Falling stock markets will play a critical role. [Read more...]