Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Why You Shouldn’t Get Excited About Gold Price Mini-Rally - 26th Jan 21
The Truth About Personal Savings Everybody Should Know and Think About - 26th Jan 21
4 Economic Challenges for 2021 - 26th Jan 21
Scan Computers 2021 "Awaiting Picking" - 5950x RTX 3080 Custom PC Build Stock Status - 26th Jan 21
The End of the World History Stock Market Chart : Big Pattern = Big Move - 26th Jan 21
Stock Market Recent Sector Triggers Suggest Stocks May Enter Rally Phase - 26th Jan 21
3 Top-Performing Tech Stocks for 2021 - 26th Jan 21
5 Tips to Manage Your Debt - 26th Jan 21
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold and Silver Bullish Omens

Commodities / Gold and Silver 2012 Jul 31, 2012 - 08:48 AM GMT

By: Peter_Degraaf

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleThis chart courtesy Mises.org shows the true U.S. money supply. The trend is exponential and this trend may well put pressure on gold and silver to rise in response. According to Erste Group Research the combined Base Money Supply of the four most important Central Banks has been growing at 15.2% per year since 2000!


“This Currency, as we manage it, is a wonderful machine. It performs its Office when we issue it; it pays and clothes Troops, and provides Victuals and Ammunition; and when we are obliged to issue a quantity excessive, it pays itself off by Depreciation.” .....Benjamin FRANKLIN


Featured is the weekly gold chart with a five year perspective. Price is breaking out in similar fashion to the breakout in 2009 - after the 2008 pullback. The supporting indicators are bouncing up from support levels (green lines).
.....On Friday the bullion dealer Standard Bank noted: “There currently is a large short position in Comex gold. Since 2004 (when physically backed gold ETFs were introduced to the market), there have been just five times that the size of the Comex gold non-commercial short positions stood out.”
Three of these short spikes were followed by subsequent gains of 25%, 23% and 36%. The exception was the crash year of 2008. In that case gold did nothing for three months — and then rose 19%.


Featured is the weekly gold chart with the Accumulation/Distribution line at the top. Notice how a rise in the A/D line is almost always matched by a rise in the gold price. The latest jump in the A/D line is not (yet) matched by gold. The expectation is that unless the A/D line should suddenly decline, gold is likely to advance. According to the Financial Times of July 19th, the Shanghai Gold Exchange on August 31st will open to investors from many parts of the world. At the present time this exchange is open only to a few selected parties. By opening up the exchange, the gold exchanges of London and New York will face some serious competition.

“The greatest shock of this decade is that more people are about to lose more money than at any time before in our history. And the second biggest shock will be the incredible amount of money just a relatively small group of people will make at exactly the same time.” …Larry BATES (Author of ‘The New Economic Disorder’)

This chart courtesy Cotpricecharts.com shows the number of ‘net short positions’ among commercial gold traders declined from 159,000 to 136,000 this past week. It also shows the hedge funds and large speculators (grey bars) are not yet heavily loaded up with gold contracts. This chart is ‘gold-bullish’.

“Money is too important to be left to central bankers. You essentially have a group of unelected people who have enormous power to affect the economy. I propose replacing the Fed with a laptop computer to calculate the monetary base, and set it to expand it by a predictable 2% per year through war, peace, feast or famine.” .....Milton FRIEDMAN.


Featured is the daily bar chart for TIP, the bond fund that is indexed for inflation. The price of gold is at the top. Usually, whenever TIP produces a rally it coincides with a rising gold price (five out of five during the past two years). Tip has been rising since April and gold has not (yet) followed. That may change, especially if TIP should continue to bounce off the rising 50DMA.

“Gold is an expression of the world's justifiable distrust of the way our central bankers conduct their affairs.” …..Jim GRANT.

Featured is the daily silver chart. Buying interest in physical silver at 26.00 is providing a floor that has held since October. The CCI at bottom of chart has turned positive (green uptrend line). The silver price is breaking out at the green arrow. The RSI at top of chart displays a bullish inverted ‘head and shoulders’ pattern with the neckline at the blue arrow. This neckline appears ready to give way to the upside. The fact that silver was able to outperform gold on Monday July 30th is a bullish omen.
According to the USGS the total amount of silver mined in history is about 46 billion ounces. This compares to about 5 billion ounces of gold. This ‘mining ratio’ is 9 to 1. The current ‘trading ratio’ is 57 to 1. The ratio is clearly out of whack. In view of the fact that most of the silver consumed by industry is ‘used up’, the expectation is that the ratio could narrow dramatically in the years ahead. Silver usage in the solar industry is expected to rise to 100 million ounces by 2015, compared to 50 million ounces in 2010 (source: Silver Institute).

“In a bull market, every time price comes near or below the 200 day moving average, it represents a buying opportunity.” ….Joseph GRANVILLE.

Featured is PSLV the Sprott silver trust. The pattern is a bullish falling wedge. A breakout at the blue arrow sets up a target at the green arrow. A breakout there turns the trend bullish. At the top of the chart is the RSI. Just as in the silver chart above, an inverted ‘head and shoulders’ pattern is visible. This is a bullish pattern and a rise above the black arrow could turn into a strong move for PSLV. ‘Up volume’ is building. The premium over bullion is still low at just 3.03%.

“Money is the most important subject intellectual people can investigate and reflect upon. It is so important that our present civilization may collapse, unless it is widely understood, and its defects remedied very soon. ….. Robert H. HEMPHILL, (Former credit manager, Federal Reserve Bank of Atlanta, GA).


This chart courtesy Sprottphysicalbullion.com shows the premium of PSLV over bullion. By comparing this chart to the PSLV chart above, we find that when the premium rises to 25% or higher, it is time to take profits. When the premium drops below 5% (as now), it is usually a good time to buy silver. According to the U.S. Geological Society: “Silver will be the first element in the periodic table that will become extinct”.

Gabirol, Ibn: “There are four kinds of men in this world:
1. The man who knows, and knows that he knows; he is wise, so consult him.
2. The man who knows, but does not know that he knows; help him to not forget what he knows.
3. The man who knows not, and knows that he knows not; teach him.
4. Finally there is the man who knows not, but pretends that he knows; he is a fool, therefore avoid him.”

Happy trading!

By Peter Degraaf

Peter Degraaf is an on-line stock trader with over 50 years of investing experience. He issues a weekend report on the markets for his many subscribers. For a sample issue send him an E-mail at itiswell@cogeco.net , or visit his website at www.pdegraaf.com where you will find many long-term charts, as well as an interesting collection of Worthwhile Quotes that make for fascinating reading.

© 2012 Copyright Peter Degraaf - All Rights Reserved

DISCLAIMER: Please do your own due diligence. I am NOT responsible for your trading decisions.

Peter Degraaf Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

JasonS
02 Aug 12, 07:48
Silver 'extinct'

I hate that comment, 'Silver will be the first element to become extinct' It is simply not true. Whether silver is in the landfills or in bullion bars and coins or in old used bandages and broken mirrors, it is still on planet Earth, and therefore, NOT extinct. It has just been dug up and reburied. Until we start sending all our silver into outer space, please stop quoting that USGS statement.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules