Axstones notes technical and fundamental analysis on GOLD

[axstone]

HUI LOOKS Good here.. algorithms should cover shorts and go long here soon

[budfox]

Monday looks like a good day to open some positions, futures down hard over Euro elections. We'll know when Asia wakes up.

[Resande]

Axstone, good to see you.

The French and Greeks have voted and it appears the Euro is dropping this evening. The corresponding rise in the dollar index is reflected in the Au and Ag spot prices down slightly (but not as much, in percentage terms, as the dollar has risen). But when europe discovers that the U.S. is in equally bad shape, then we should see both metals rise.



Here is the latest from FOFOA:

http://www.fofoa.blogspot.com/2012/0...inflation.html

Yo Ho

[JohnPA]

Nice to see you again Axstone! Hope all's well w/ you and your Mrs. Visit again soon...the place isn't the same without you.
JPA

[fat panther]

Welcome back to the messenger, or should I say "spear catcher".

Whatever, nice to see you Ax

Fat

[kiwi_envoy]

Welcome back to the messenger, or should I say "spear catcher".

Whatever, nice to see you Ax

Fat

I hope the return of the lost one marks a bottom in the POG!!! ;-)

[Weatherman]

I hope the return of the lost one marks a bottom in the POG!!! ;-)

Agreed! I am looking forward to seeing some huge green arrows pointing almost straight up!!!

[Gcubed]

Glad to see some signs of life on the thread. I'll try to talk Zed into coming back!!

[prophet]

Glad to see some signs of life on the thread. I'll try to talk Zed into coming back!!

You do that!

[Nero]

There was a reason people left this thread and haven't come back, gee I forgot what it was, oh yah now I remember.

[anywoundedduck]

Glad to see some signs of life on the thread. I'll try to talk Zed into coming back!!

They don't call you cubed for nothing. A real brick, if you know what I mean.

[Gcubed]

They don't call you cubed for nothing. A real brick, if you know what I mean.

Well gosh darn gee wizz Duck! I wuz bumpin' the thread monthly just to keep it alive. The thanks I get!! Chit.

[anywoundedduck]

Well gosh darn gee wizz Duck! I wuz bumpin' the thread monthly just to keep it alive. The thanks I get!! Chit.

Just kiddin, Cubed, just kiddin. Don't take it to heart.

[bemac]

Just kiddin, Cubed, just kiddin. Don't take it to heart.

He aint got no heart!

[Gcubed]

He aint got no heart!

Hearts are for bag holders. Ya can't have a heart AND survive in this business.

[fat panther]

Wouldn't it be nice/fun to have Mag, Fact, Jive, Farside, just to name a few (sorry to those I missed) back here?

[axstone]

After a Bear Trap. this could be the most explosive move % wise in the Bull market yet

this would send the HUI to higher evaluations yet.. pushing it over 1,000 on the HUI

[axstone]

Close to the end.

[Eat Beef]

Huh?

Another spike down like 08 leaves us around $250.

[axstone]

ouch

[Gcubed]

Huh?

Another spike down like 08 leaves us around $250.

340 is easy doable and that could clinch it. Couldn't hold is also possible. Hell, it's miners!!

[Farside]

Wouldn't it be nice/fun to have Mag, Fact, Jive, Farside, just to name a few (sorry to those I missed) back here?

Careful what you wish for FP

[JohnPA]

One sighted and accounted for; three names minimum to go.

[Farside]

Well I think we can cross out FACT. I spoke to him today and he's busy with other stuff.

[JohnPA]

Nice to hear FACT is alive and well.

[fat panther]

Out of zsl with 12% loss in three days Follow me and do the opposite, you'll be a winner.

[EchelonPL]

Well I think we can cross out FACT. I spoke to him today and he's busy with other stuff.

Those were fun times in 2009.

Fact is most certainly out fighting the pain-bodies for us. Cheers.

[fat panther]

Out of zsl with 12% loss in three days Follow me and do the opposite, you'll be a winner.

Have to get my emotions in check. Leverage!

[Zilver]

.

“This Is the Bottom for Gold” – John Hathaway

May 23, 2012
http://www.ino.com/blog/2012/05/this...john-hathaway/

In an interview with Louis James, John Hathaway discusses the US’s economic outlook and why he’s delighted by the current bearish sentiment toward gold.




[To be a successful speculator, one must be willing to go against the mainstream investment trends, as John is. There's no better way to get a primer on contrarian investing than by sitting in on the recently concluded Casey Research Recovery Reality Check Summit – and you can do that by ordering the Summit Audio Collection today. Every presentation, every chart and graph, and every actionable investment tip can be yours, in either the instantly available MP3 files, or in CD format.]

Louis James: Ladies and gentleman, thanks for tuning in. We’re at the Casey Research Recovery Reality Check Summit. We’re talking with John Hathaway, one of the more successful fund investors – institutional investors – in our precious metals field near and dear to my heart. John, can you give us a quick version of what you talked about here, for those who didn’t make it to the conference?

John Hathaway: Sure, yes. I think we’re at the end of a correction that resulted from the peak last summer. It was overcooked, kind of hyperventilated hysteria over the debt-ceiling talks, the rating downgrade of the US sovereign debt, and I think basically the stocks and the metal had been working off that boiled down to what we now have is a simmer. I think we are at a position where there’s not a lot of downside, and I would not be surprised by revisiting the previous highs of $1,900 and maybe even new highs over $2,000 this year.

What will do that is basically – so much of the narrative has been quantitative easing. When Bernanke announced on the 29th of February that they were done with quantitative easing (and if you believe that I’ve got a bridge to sell you, but for the time being let’s assume that there won’t be any), I was very impressed that gold did not go to a new low. It printed somewhere below $1,600 at the end of the year, made a couple-of-day swoon, but it didn’t go to a new low. And then when the Fed minutes came out it also did not go to a new low, it kind of reiterated what Bernanke said. So the narrative may be changing. I’m not ruling out quantitative easing as a possibility, but there are things out there that gold might be looking at that the CNBC mentality hasn’t figured out.

Remember that gold rose for many years before we even heard of quantitative easing; it was in a steady uptrend. So what could those things be? What would take gold – what would be the new headlines that might take gold to higher highs? To me, the biggest thing is that the Federal Reserve has purchased something like 61% of all new Treasury debt in the last year; and if they aren’t going to continue that, then what’s going to happen to rates?

Louis: Right.

John: The Chinese – who had been big supporters because they were rigging their currency – have not been generating foreign exchange to anything like the extent they were, so their participation rate in Treasury auctions has gone way down. If you look up the TIC numbers, foreign buying of Treasuries has dropped precipitously, so you have the two biggest pillars of support for keeping rates low in question here, and let’s see what happens on June 30th. If you don’t have a political buyer, either the Chinese and foreign buyers who are manipulating currency, and the Fed because they said they aren’t going to do it, what are rates going to do?

If you are going to get a risk-free return inflation-adjusted today that’s not politically motivated, it’s got to be somewhere around 4-5% on the short end of the curve. Every hundred basis points adds a huge amount to the budget deficit, so to me we’re in a real trap here, where it’s going to be a game of chicken as to whether the Fed can really live up to what Bernanke said on the 29th.

Louis: Isn’t that really the bottom line? They can’t allow that interest rate to rise with the debt outstanding –

John: It seems very difficult. The recovery, the alleged recovery that we had, is very… I’ll grant that things are better than they were a year ago or two years ago, but you’d have to call it feeble at best and maybe not sustainable. That’s one thing that I think could affect the gold market.

The second thing, and I think it’s very important too, is that inflation is rising. Even though the economy is soft, the number I look at – and I know we’re going to have John Williams speak at lunch, and we know he has a very good take on it – is the MIT Inflation Index, because that’s real-time pricing of billions of products. You can get to that website just by googling “MIT Inflation Project”; and that does not include services. Most of the services I take are inflating at more than 5%; they are closer to 10%. But goods that could be measured in real time are rising at 5%, so that’s also going to be a factor. That means if rates stay where they are, the Feds are just going to be that much more behind the curve.

So those are two things; and the third thing is that there’s $1.5 trillion of liquidity in the system that should the recovery – and I’m not a macro forecaster, but let’s say the recovery does sustain itself – you’ve got $1.5 trillion of free reserves that could just turn into money supply. Then you really would have a potentially hyperinflationary scenario, and the Fed would be completely powerless to do anything about it. So I think that’s bullish for gold – gold is not backward looking, it basically looks forward. I can go on and on. You’ve got the European unresolved sovereign debt crisis in Europe.

Louis: Let me jump in with a question about this, then. You’ve stood out really from the crowd in that most people agree on the general prognosis for gold. Most people are sort of near-term bearish, you know, the ones –

John: It makes me so happy.

Louis: [Laughs] But, you know, once a bear sentiment sets in, it seems to almost have its own momentum.

John: Yes.

Louis: You’re the only who’s saying “I think we’re near the bottom.” Most people are saying, “Sell in May and go away” –

John: Yes, I heard a couple of things from this session that just made me want to jump up and buy –

Louis: I understand the contrarian reason for that, but can you tell our audience a couple of reasons why you think we might be near the bottom or why you’re ready to buy now and not waiting to see how this summer turns out?

John: Sure. Well, first of all, I’m not a trader. I mean, I’m long, and last summer I thought, “Gee, this is really a little spooky, we’re not at a sustainable level,” but there wasn’t a whole lot I could do about it. And here we are and we have some cash, we have some inflows, so we are able to put money to work. And what is it that makes me think we’re there? Sentiment numbers are extremely negative, historically, when they’ve gotten to these levels. By the way, I put out a quarterly newsletter now that has a lot of this data, which can be found on our website.

Louis: Go ahead and give us the website.

John: It’s the Tocqueville Asset Management website, and it should be fairly easy to find. So sentiment is at levels that have been associated with big rallies. Traders’ commitments, net longs, net spec longs are way, way down there. I look at that a lot just as a way to see where the market is positioned. The guys who can create some volatility are not there, and so if gold starts moving, they won’t want to miss it, and so they’ll come in. And then, we’ve looked at some technical stuff. I’m not a technician but most of what I see from a technical perspective is extremely constructive. So I put those things together.

Sentiment is rock bottom. COMEX traders’ commitments are very, very constructive, and technical things that we look at are very constructive. So I would say all of those things, plus hearing these guys say that they are not going to step in – that’s more anecdotal, but that to me is just very, very positive. So I – frankly I don’t stake my reputation the way that Dennis Gartman does on making trading calls, but just as an experienced observer of this market for some number of years now, I think we’re ready to make a move higher.

Louis: Okay, well, thank you very much. Word to the wise.

John: Thank you.

[fat panther]

Posting here to try and revive Ax's thread in his absence.

http://www.reuters.com/article/2012/...85H1Q920120618

[fat panther]

While I'm here

Anyone have an idea when I can expect to at least get parity from my disasterous decision to swap gold for platinum at 1776? LOL

[Gcubed]

Posting here to try and revive Ax's thread in his absence.

http://www.reuters.com/article/2012/...85H1Q920120618

Try this!!

[Aussie]

It's time to crack $1630 - 1650 today! It's time for gold to start moving up . . .

[MinedOverMatter]

As an old GIM1 guy who's checking back in here for the first time in a long while, it's definitely nice to see Axstone back! In fact, what prompted me to log back in was a curiosity about what Ax might be up to these days.

For those who don't remember my moniker, I am a professional gold and silver stock analyst publishing articles at The Motley Fool. A bunch of you GIM old timers, and the existence of this forum in general, played a big part in accelerating my learning curve several years back. From Axstone, I received a daily education, and I'm grateful for all he did here.

In fact, now that I'm glued to my computer helping retail investors make sense of this sector, I can empathize with the eye strain that I recall him reporting.

Anyway, for any interested, all my recent published work can be found by bookmarking the following link:

http://www.fool.com/author/1632/index.aspx

I visited Brigus Gold's Black Fox mine last week for the second time, and that first-hand report will be out later today. I attended the grand opening of Aurcana's Shafter mine in Texas a couple weeks ago, and some of you may appreciate that write-up as well.

http://www.fool.com/investing/genera...-surprise.aspx

I'm looking forward to checking in here from time to time, and I wish all GIMers a very profitable run once these battered stocks finally recapture upward momentum in a big way.

Mined over Matter

[Weatherman]

I'm looking forward to checking in here from time to time, and I wish all GIMers a very profitable run once these battered stocks finally recapture upward momentum in a big way.

Chris, Great to see you back in the hunt! Come back and visit more often!! I missed many of your articles, but I did see the one about Charlie Munger's uncivilized comments against gold. You hit that out of the park!

By the way, the next time someone tells you that the USA financial situation is hopeless and there are no solutions, point them at the source link in the thread below:
http://www.goldismoney2.com/showthre...ncial-Problems
If you have any alternative solutions to suggest, I would be happy to hear about them!

[Aussie]

Yes, I'll second that, it's good to see you back. I enjoyed your articles as well . . .

[MinedOverMatter]

Thanks guys! Nice to see you all again. It's been one pisser of a ride in the mining shares for the past year, but I'm sure you'll all agree we're looking at a powerful run pretty soon here.

I liked Marrone's quote this week stating we've reached an inflection point:

“What the dividend does is it demonstrates that we are prepared to return value to shareholders and distinguish ourselves from the ETF,” Mr. Marrone said in a telephone interview, predicting a turnaround in gold mining equity as investors come back to the sector. “We are at the inflection point of the equities over-performing the metal.”
http://www.theglobeandmail.com/repor...rticle4300135/


Here's that Brigus write-up I referred to:
http://www.fool.com/investing/genera...the-grade.aspx

Weatherman, Someone else had sent the 1/2% solution article my way, but I hadn't had a close look yet. I do consider a more abrupt and reactive process far more likely, but there may be value in getting people to look at alternatives plans somewhere between infinite easing and a disastrous unwind. Thanks for food for thought.

[prophet]

Thanks for the AURcana writeup.

One of me biggest silver miner holdings.

[fat panther]

Can't figure this out

Does "Operation Twist" increase M1? Inflationary at all (or alot)?

TIA

[Aussie]

I posted this elsewhere but thought it worth re-posting here . . .

http://www.goldismoney2.com/showthre...rect-yuan-deal

[Resande]

Shipmates:

A rather interesting interview of FOFOA by Vivek Kaul, wherein FOFOA repeats his prediction of Au at $55,000/oz measured in today's purchasing power. He also explains his belief that Au will be held as a reserve without having a formal gold standard.

http://www.fofoa.blogspot.com/2012/07/interview.html

Yo Ho

[bemac]

Shipmates:

A rather interesting interview of FOFOA by Vivek Kaul, wherein FOFOA repeats his prediction of Au at $55,000/oz measured in today's purchasing power. He also explains his belief that Au will be held as a reserve without having a formal gold standard.

http://www.fofoa.blogspot.com/2012/07/interview.html

Yo Ho

That would make all the gold currently above ground worth ~300 trillion dollars (today's dollars). I don't see it.

[Resande]

That would make all the gold currently above ground worth ~300 trillion dollars (today's dollars). I don't see it.

Even at this level, it would not nearly back the total fiat currencies in circulation, sovereign and corporate debt outstanding in the world today. It is very believable.

Yo Ho

[Gcubed]

Has anyone noticed that BOTH Ax and Zed are gone? I wonder??

[d-lod]

Has anyone noticed that BOTH Ax and Zed are gone? I wonder??

They were two sided (of) coin

[d-lod]

They were two sided (of) coin

even pigs can fly is unseen

[Silver Buck]

Has anyone noticed that BOTH Ax and Zed are gone? I wonder??

Now that you mention it, where have they both gone and run off to?

[fat panther]

On another note

http://www.telegraph.co.uk/finance/f...tery-move.html

And, Larry may still be vindicated. $1700+- today, a few days. Still have dry powder sitting at 1650 and 1550. Hope I don't waste it being greedy.

[Gcubed]

Merry Christmas Ax!!

[fewferfev]

seeing if I can post this chart...
http://mediacdn.disqus.com/uploads/m...5/original.jpg