Gold Crash Anniversary Day

silver crashGold is holding up reasonably well, considering that Indian buyers are so focused on the election.
Generally speaking, this is the weak season for gold. Also, the April 12 – 15 period is when the gold market crashed in 2013. As we saw Tuesday, Nervous participants tend to be sellers around the anniversary of such events. [Read more...]

Stewart Thomson: Indian National Election is the Most Bullish Event for Gold in Past 100 Years!

indian goldThe Indian nation election is arguably the most bullish event for gold of the past 100 years.
That election began yesterday. It’s the world’s largest national election, so it’s a long process. The results should be released around May 16.
Other than a bullet or vote counting fraud, I don’t think anything can stop Narendra Modi from winning this election. He is strongly endorsed by all of India’s major bullion and jewellery associations.
These “titans of ton” are ready to move massive amounts of gold from the Western gold community’s mines, to eager Indian citizen buyers.
The latest polls suggest major gold proponent Narendra Modi is just five weeks away from becoming the prime minister of the world’s most powerful gold buying community.
[Read more...]

T-Bonds Forming Massive Head & Shoulders Top Pattern-Major Implications for Gold!

freefallAt this point in time, Fed tapering clearly isn’t much of a concern to bond market participants.
In the longer term, T-bonds are forming a large head & shoulders top pattern. What are the implications of that pattern for gold investors? [Read more...]

Be Right & Sit Tight!

chairBecause of the severe drawdowns that many gold market investors have experienced over the past few years, emotions can run very high on any disappointing sell-off, like the current one.
It’s important for investors to fight those emotions and maintain their focus on the big picture.
[Read more...]

Stewart Thomson: Gold Market Fear Is Unnecessary

no gold for youSince the start of this year, gold has performed extremely well. The daily chart shows the shiny metal moving steadily higher, in a bullish channel.
The current minor trend sell-off in gold is technically healthy.
Also, this price correction should not come as a surprise to any fundamentally-oriented investor; the Crimean crisis seems to be factored into the price now, and there is a key FOMC meeting Wednesday.
[Read more...]

“The Gold Demand Mystery” – Stewart Thomson

indian goldThe bottom line is that smuggled gold going into India in 2013 probably did so at the staggering rate of about 40 tons a month.  In my professional opinion, that number is probably still rising, and it could go even higher in 2014.
I believe that most of investors in the Western gold community would agree that gold feels solid here. It feels like a mysterious floor of substantial demand is supporting the market on all sell-offs, yet the source of that demand is opaque.
Many technical indicators on both the daily and weekly charts are flashing sell signals at nosebleed levels, yet gold refuses to slide in a material way. Is it possible that Indians have lost patience with broken government promises to lessen the draconian gold import duties? I think so. [Read more...]

Stewart Thomson on Gold: The World Has Entered a Gold Bull Era

The West is still a mover of the gold price, but no longer the prime mover.  While interest rates and inflation numbers are still very important drivers of the gold price, the world has essentially entered a “gold bull era”.
This era is themed around gold jewellery demand that should grow relentlessly for decades.  It could soon totally overwhelm mine and scrap supply.
Gold jewellery plays a highly significant role in Eastern culture and religion, and bank economists continue to underestimate the enormous monthly tonnage imports of Chindian (Chinese and Indian) gold dealers. One upside surprise seems to follow another.
Demand grows relentlessly, because Chindian industrialization grows relentlessly. It’s an enormous multi-decade process that involves more than two billion citizens, who are all potential gold buyers. [Read more...]

Gold: Big Picture Focus

gold standardAs gold rises steadily higher, it “refuses to have a correction”. That’s making some investors nervous. Gold is the greatest investment asset in the world, so it’s important to stay focused on the big picture.
Gold market technicians should be open to the possibility that in the bigger picture, this rally has only just started.
Many of PM investors are likely to sell on a rally back to the $1500 area, to cut the huge losses they sustained in 2013.  They are highly confused, and suffering from immense drawdowns.  This fact defines them as weak-handed investors.  When weak hands book losses, whether it is on a rally or a decline, that’s bullish.
When weak-handed investors are looking to bail on a market, that market tends to move much higher, and the Dow moved relentlessly higher during the 2003 – 2007 period. I think a similar situation may be at hand now, in the gold market. [Read more...]

Stewart Thomson: Gold And The Phillips Curve

Reuters/Tamara Abdul Hadi/Files

Reuters/Tamara Abdul Hadi/Files

Ben Bernanke believed that the financial crisis of 2008 produced the need for strong but temporary action to be taken by the Fed. His focus was on providing liquidity to the financial system, as a substantial but temporary strategy.
In contrast, Janet Yellen believes in the Phillips Curve. In the 1950s, William Phillips suggested that there is an inverse relationship between inflation and unemployment, and his ideas are used extensively by Keynesian economists.
The bottom line is that Dr. Yellen is a strong Keynesian who is now in charge of America’s central bank. She believes that real unemployment will fall significantly, if she raises the inflation rate. (Yes, you read that correctly)
That has the attention of powerful institutional money managers, and it should have the attention of everyone in the gold community. [Read more...]

Stewart Thomson: Perfect Storm of Demand to Send Gold to $2800?

empire revoltIn the gold market, there may be a “perfect storm” of bullish fundamental forces converging now.
There’s a potentially enormous head and shoulders bull continuation pattern forming on the gold monthly chart. The technical target is about $2800.
While a move to $2800 may seem unlikely, more fiction than fact, fundamentally-oriented investors should remember that the entire nation of India is essentially in “handcuffs”. Narendra Modi is the front runner in national election polls. This man has been weighed in silver, a ceremony reserved for Hindu priests. He’s publicly stated that he doesn’t want to stifle the goldsmith industry. He wants to develop it.
Many investors in the Western gold community also love silver. It hasn’t really shown much upside action in 2014, but I think that’s about to change.
The $20.60 area has limited the upside action recently, but a move above there is likely to attract significant hedge fund buying. [Read more...]

Gold Bull Janet Yellen & The Dow

yellenLate in the fall of 2013, I predicted that the Fed would begin to taper QE, and keep tapering until it was gone. I stunned a lot of investors, by suggesting that this “taper caper” would be bearish for the Dow, and bullish for gold and gold stocks.
During 2014, I expect Dr. Janet Yellen to continue (and possibly accelerate) the tapering process that Dr. Bernanke started, creating more selling in the Dow, and more buying in gold! [Read more...]

Stewart Thomson: DOW Looks Like Barrels Full of Investors Going Over Niagara Falls!

market crashOn the weekly chart of the Dow, there is a large and very bearish wedge pattern that has developed.
Many key technical indicators look like barrels full of investors, going over Niagara Falls. While a small relief rally is overdue, I would not touch the Dow on the buy-side, unless it falls to the 13,600 area.
The bottom line is that the Dow is already in trouble, after just one tapering event.
One can only imagine the real panic that US stock market investors would feel, if each subsequent tapering event is accompanied by even bigger falls in price. [Read more...]

Stewart Thomson: Gold Stocks Pause, But Not For Long!

dollar collapse panicMost junior gold and silver stocks have taken a horrific beating over the past few years, even while gold prices have remained relatively elevated.
Bank analysts suggest that high mine costs are largely to blame for this sell-off.
Recently, naked shorting seems to have diminished. Gold stocks have rallied very strongly over the past month, on enormous volume.
Can the rally continue, and is it related to lower mining costs? [Read more...]

George “Junior Gold Stocks” Foreman

down goldIn 1973, as heavyweight boxing champion Joe Frazier was knocked to the canvass by George Foreman, Howard Cosell uttered the now-famous words, “Down goes Frazier!”  Are current investors in the American stock market on the verge of taking a beating like Joe Frazier did?
Gold mining investors don’t need America to burn like Rome did, to make a lot of money.
Gold mining companies need rising demand for gold jewellery from a growing Chindian middle class, dropping fuel costs, and better management. Yesterday’s truly gargantuan volume in GDXJ shares suggests that key institutional investors believe all these bullish keys are essentially in place now.
Is George “junior gold stocks” Foreman ready to knock Joe “Dow” Frazier to the canvass?
Well, if the first two weeks of January are an indication of what is coming for the rest of the year, the answer is clearly, yes! [Read more...]

Stewart Thomson: Lower Oil To Fuel Gold Higher In 2014

gold morgan oilBarring a black swan event, lower oil prices are quite likely in 2014, and that should be viewed as very good news for gold investors!
Lower oil is good news because oil imports are the main cause of the Indian current account deficit (CAD). The current Indian government has done nothing substantial to reduce oil demand and transportation costs for its poor, so only lower oil prices in the market can affect the CAD. [Read more...]