When we first published this report in April, gold was hovering around $1,500/ounce. Amid all the political wrangling in Washington about raising the debt ceiling and narrowing the budget deficit, gold rose further to $1,664/ounce through August 5. After Standard & Poor's downgraded the United States' credit rating from AAA to AA+ on August 5, gold jumped about $55/ounce to $1,719/ounce on August 8. Investors' concerns about the validity and efficacy of the debt deal, uncertainty about further deficit reduction suggestions that will be suggested by the Super Congressional Committee, continued dollar weakness and the worsening of the European debt crisis all appear to have helped push gold even higher since then to around $1,871/ounce as of this writing. [Read more...]

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In our most recent commentary we wrote about the relative strength in the gold equities. Gold equities have not only bucked the downtrend in the equity markets but in relative terms are breaking to new highs against equity indices. In the chart below we plot precious metals prices, GDX versus the Morgan Stanley World Index and GDX versus the S&P 500. We highlight how each performed during bear markets. Other than in the crash in 2008, precious metals and the equities have performed quite well during times of struggle for conventional stocks.

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Savy and experienced market technicans and traders will laud the concept and importance of relative strength. Relative strength analysis can be used on any time frame. On large time frames it can tell us which sectors could be future leaders. On shorter time frames it can also provide insight to the future. In this analysis we examine the relative strength of the gold stocks today and compare it to the past as some important insights can be gleaned. [Read more...]

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In recent months we've been talking and writing about a potential acceleration in Gold. The chart said we were close and in all honesty Gold has actually been in a state of gradual acceleration since the 2008 low. Furthermore, we'd noted that in most secular bull markets, accelerations usually begin in the 11th or 12th year and are totally obvious by the end of the 13th year. Given the move of the past five weeks, there is no reason to think otherwise. An acceleration in the bull market has begun and will take Gold to $2000/oz and quite a bit higher in the next 18 months. [Read more...]

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In recent weeks I've read a few missives from mainstream advisors and pundits on the merits of stocks. These people despise Gold and are quick to point out that since March 2009, stocks have outperformed Gold. This means very little as it is an arbitrary date. Gold will continue to outperform stocks and then stocks will outperform into the next decade. [Read more...]

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A variety of factors are lining up that lead us to believe we are on the cusp of a major move higher in the gold stocks. We feel we have been saying this for a while but the reality is we are moving closer and closer to that moment. The fundamentals couldn't be more obvious and being in the 11th year of a bull market means the timing is ripe. We think you will find the facts and conclusions extracted from the technicals, sentiment, and valuations very compelling. [Read more...]

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An important shift in global markets is taking place and it bears introspection. Gold has broken to a new high while Silver has established a bottom. Precious metals stocks have rebounded significantly from support. At the same time, important global stock markets are in the early stage of a technical breakdown. We don't foresee a repeat of 2007-2008, yet odds are good that global stock markets are beginning a cyclical bear market and unlike the last cycle this is coming at a time when precious metals are set to accelerate to the upside. [Read more...]

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Last week we wrote about Silver so this week we decided to provide an update on Gold. In looking at the price action and sentiment indicators we find that Gold is once again ripe for what is becoming an annual seasonal breakout. Gold has broken to a new all-time high in three of the past four years and presently, we are anticipating another breakout. [Read more...]

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Successful market timing is based on careful use of technical analysis and sentiment analysis. Technical analysis measures supply and demand and sentiment analysis takes that a step further by looking at investor attitudes their positions and money flows. This information helps us assess probabilities. Nothing is certain but we want to see strong evidence before forecasting a turn in the market. In regards to Silver, we see strong evidence that a bottom is in place and the market will move higher in both the short and intermediate term. [Read more...]

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Oil markets will be watching economic developments closely as we head into Q3 due to concerns about OPEC's recent failure to address a potential shortfall during the second half of the year. OPEC seems to be split between those who have spare capacity and those who don't. Apart from political differences, Saudi Arabia was looking to increase supplies amid autumn forecasts of a two million barrel-per-day deficit. The other bloc, led by Iran, which needs high prices and is already operating at full capacity, argued that demand for oil is set to soften due to weaknesses in the U.S. and other economies. [Read more...]

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