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
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Commodities Market Wrap - Gold, Silver, Crude Oil and Mining Stocks

Commodities / Gold & Silver Apr 23, 2007 - 06:11 PM GMT

By: Douglas_V_Gnazzo

Commodities Oil
June crude lost $2.22 to $64.11. May gasoline was down 1.9% and Natural Gas fell 5.4%. As the chart below shows, crude is at a critical stage - it either rallies up from here to hold support, or it breaks through support and starts a new leg down.


Big Oil bids for giant UAE gas project

The above chart clearly shows the devastating fall that natural gas took right after 911. All the predictions were for much higher gas and oil prices. So, what did gas do - it dropped over 60%.

Commodities

The CRB index was down 1.8% for the week. As we have said and shown many times, the CRB is not the best of indexes for judging the overall commodity sector. It is a weighted index that is heavily tilted towards energy.

There are many different commodities. On any given day - some are up, and some are down. Furthermore, some are in bull markets and some are in bear markets. To use the CRB to determine the strength or weakness of the commodity market is a fool's game.

Below are some charts that show these different realities.


Copper


Platinum


Sugar

Next is the point and figure chart for the CCI Index - an unweighted index of commodities.

Kuwait readies for possible US-Iran war
Kuwait readies for possible US-Iran War

Silver

Silver was down 1.0% for the week, closing at $13.95. Silver has not yet closed above its Feb. highs, and has been somewhat weaker then gold as of late. Yet certain silver stocks have been the best performers in the precious market arena.

The industrial metals have just broken above their upper trend line.

Troubled Persian Gulf destination for Nimitz
Nimitz Readies for Duty

Gold

Gold was up $5.90 for the week, closing at $695.80 and within spitting distance of its 25+ year high. It closed above its February high this week, but has yet to test or surpass the May 2006 high near $722.

The daily chart of gold below shows it just peaking above its upper trend line. Notice the negative divergence on the chart per the RSI indicator and the MACD indicator.

The POG needs to do some work to turn these indicators up.

Next is the daily price chart for GLD - the gold ETF or exchange traded fund. It too has just peaked above its upper trend line and has its sites set on the May 2006 high. Time will shortly tell.

Below is the weekly chart of gold going all the way back to the start of the gold bull market. We have listed this for several reasons, which will become self-evident as we proceed further along.

Note the four (4) "stages" in the price action, as well as in the RSI indicator at the bottom of the chart.

HUI Gold Stock Index

Up first is the daily chart of the Hui Index. For the week the Hui was down 8.31 points to close at 356.15 (-2.28%). As the chart below shows, there are several negative indicators flashing, which need to be turned up into positive territory before a sustainable rally up is possible.

Once again the Hui broke above resistance only to close down back below it. We mentioned that this was quite possible in last week's report. RSI shows negative divergence, as well as turning down sharply; however, it was entering overbought territory.

MACD shows a negative divergence with a negative cross over looming as a distinct possibility. These indicators all need some work to turn them up and positive.

Next we have the chart of the Hui/Gold Ratio. This compares the performance of the gold stocks to the performance of physical gold. A sign of a strong gold bull market is when both the gold stocks and physical gold are headed up, with the gold stocks rising more - generally at a 3 to 1 ratio to physical gold.

The chart shows that beginning in March the gold shares were out performing physical gold. Note, however, the change in the chart in April outlined in yellow. During this time physical gold has been outperforming the stocks. Obviously, it remains to be seen how this pans out.

Now we come to le piece de resistance - the Hui Index weekly chart going back to the beginning of the gold bull. This is why we presented a chart of physical gold going back to the start of the bull market at the beginning of the pm section, as the price action of gold is the main determinant of the price action of the gold stocks.

As stated earlier, the HUI Index broke above its December and February highs this past week, but still remains below its May 2006 high of 401.69. Recent price action strongly suggests that the index is going to at least test the May high.

The $64 dollar question is whether the index is going to break out above the new high, and start the next leg up in the gold bull, or if it is just going to test the high and fall back and regroup (or even experience a further correction) before starting the next leg up.

Obviously no one definitively knows the answer to this question. The best one can do is to be aware of the possibilites and the highest probabilities that may occur. To help try to determine that we have gone back and looked at the entire gold bull market to date. We have referenced this chart a few times in the past. It shows the entire bull market in the Hui Index, with the 4 various "stages" delineated.

As the chart clearly shows, each time a new high was reached the market would then correct to an initital low. It would then rally back up and test the high. Subsequently it would once again fall and test the recent low. From there it would finally begin its assault on the next leg up to new highs and the next plateau. A series of higher lows and higher highs was always kept intact.

If you note - this sequence of price action (high/low-retest high/retest low-new highs) was repeated in ALL the stages of the gold bull to date. Does this mean that they are guaranteed to repeat again - NO ? However, the probability is present.

Also worth noting is that as the gold bull has progressed, EACH correction/consolidation has taken longer in TIME to complete. So, for those who bemoan the length of time of this correction - it is to be expected.

Based on the above evidence, we are leaning toward a retest of the May 2006 high within the next few weeks, followed by a retest of the recent lows - with a higher low kept intact. We are leaning this way because it follows the course of the previous bull market corrections, however, this does NOT mean it must or will occur in this precise manner.

Also, many of the charts show divergences and negative cross overs, which need to be repaired and turned up. Most players in the precious metals sector are looking for the next leg up to be commencing, which very well may be occurring. However, we will go with discretion being the better part of valor.

The market vectors gold miners' index below shows the index just poking its head above the upper trend line. There is stiff overhead resistance in this area, but once it gets worked off the breakout should be quite strong. The index has rallied to this point several times and then backed off. This indicates that a lot of overhead supply existed, and that a lot of it has been worked off.

Individual PM Stocks

Following are several gold and silver stocks that we either own or are planning on taking a position in. We will not provide any comment, as the charts are self-explanatory. Caveat Emptor.

Summary

Oil is at an important juncture - either it breaks out with a new leg up, or it will break down with a new leg down. It will decide very soon which way it goes. The overall commodity market is doing fine, with the metals being one of the strongest sectors.

The total market capitalization of the US stock market is approximately $15 Trillion. The market cap of all Gold & Silver stocks is under $200 billion. Do the math.

At this time we favor a test of the May 2006 gold stock highs with a subsequent test of the lows - followed by a new leg up of the gold bull market. This is just one of many scenarios that could occur.

Other probable courses are that the Hui keeps going from here and tests and breaks through the old highs and keeps rising. Another is that the Hui goes down from here and then moves back up to test and or surpass the May 2006 highs.

We are watching and waiting for a good entry point to accumulate further positions. Depending on how the price action unfolds, we may also book profits that accrue.

By Douglas V. Gnazzo
Honest Money Gold & Silver Report

Douglas V. Gnazzo is the retired CEO of New England Renovation LLC, a historical restoration contractor that specialized in the restoration of older buildings and vintage historic landmarks. Mr. Gnazzo writes for numerous websites, and his work appears both here and abroad. Just recently, he was honored by being chosen as a Foundation Scholar for the Foundation of Monetary Education (FAME).

Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly, Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can yet become greater. This article is written to help facilitate that greater becoming. God Bless America.


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


Post Comment

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

6 Critical Money Making Rules