Long Term Gold Chart with Retracements

Our friend Lenny sent the patrons of the café a long term gold chart that is quite interesting  We have certainly been through the ups and downs of these markets together,

It shows the strong support at 1180, and the longer term trend line that works on a logarithmic chart.

I asked Len to include the retracement levels, because as I recalled there had been a prior big retracement earlier in this bull market, from 1030 to 681 that shook quite a few people out.

I was wondering how this current price decline compared.

Here is the chart.  We can draw lines on charts all day.  It is the action in the market, the push of supply against the pull of demand, that will set the true marks.  But these days it seems we can only count on price discovery in the intermediate term.

Russia Adds Another 300,000 Ounces of Gold To Its Reserves In August

 

 

Notice something that might be called a 'policy change' around 2007?

That is when we saw the sea change in the central banks, when they turned from net sellers to net buyers overall of gold bullion. 

The Comex moves its paper and relatively thin reserves around the around the plate. 

 

 Bill Holter thinks that China and the East are starting to take away the pricing mechanism from the CME and London.    Let's see how that works out.  I notice quite a few of the usual suspects on the SGE.

But by all accounts, Russia and China just keep quietly stacking.

 

At least based on the numbers that we know about.  They may be taking in quite a bit more from domestic sources.  I suspect that this is the case with China.

 

This chart is courtesy of the data wrangler, Nick Laird at Sharelynx.com

 

Ray Dalio: Hedging Against Fascism

"Bridgewater’s research over the past several years has focused on performance drivers, risk premiums and environments offering return opportunities.

Dalio has long been concerned with fundamental factors that could lead to the rise of a Hitler-like government, a concern that may sound sort of wacko but is supported by a number of various hedge fund managers and quantitative analysts, many of whom stay off the record. His investment products are designed to do well in more than just a rising stock market environment, which is correlated with his world view to various degrees.

A spokesperson for Bridgewater Associates declined to comment to ValueWalk."

Mark Melin, For First Time In 18 Years, Bridgewater Associates Launches New Strategy

I don't know if the above is a true representation of what Ray Dalio is thinking, or if it is just 'hyperbole for clicks.' I despise that sort of thing in general, and in instances like this it would be over the top.

I am not familiar with ValueWalk. And I am not impressed with observations about things that are based on no quotes and things that are strictly off the record.

But I thought I would pass it along, if any of you have the opportunity to ask Dalio about it, and let me know if this is true or not. This is making the rounds, I did not find it myself.

I respect Dalio and am curious about what he thinks. Otherwise I would not give this a second thought.

P.S. Actually the more I think about it, the more I will tend to give it little credibility unless I see an actual statement from Ray.

I know some hedge fund pampered princes are quick to see any return to regulation and a demand they pay taxes like most people as a 'fourth Reich' but I would be disappointed if Ray was one of them.

 

Gold Daily and Silver Weekly Charts - Option Expiration

"The mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining in the different States, and which are employed altogether for their benefit; and unless you become more watchful in your States and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of Government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations."

Andrew Jackson, Farewell Address, March 4, 1837
 

What a parcel of rogues in a nation.

Although it was not much discussed on bubblevision, today was the fairly important stock option expiration for US equities.   It was utterly overshadowed by the big BABA IPO.

Next week will be an option expiration for the precious metals on the Comex.

I cannot remember when sentiment was this low amongst the metals crowd since around 1999-2001 timeframe.

I do suspect we are making a bottom, and somewhat artificially low at that.  This ought to do enough damage to supply to provide for a high upside IF and WHEN markets become transparent and honest again.

But I will not say we actually have a bottom until we break this trend of lower highs and lower lows.  That is a mugs' game.  And there are plenty of mugs out there, who have called about forty of the last three or four bottoms in the precious metals markets.  Fear not, when the time comes, they will be 'right.' 

We need to maintain some discipline in our thinking and a focus on the fundamentals.  Talk is cheap.

So what does this mean?  Holding positions with NO leverage, and of a comfortable size with a longer term price horizon that do not interfere with short term cash flow needs.   To do otherwise places one at the mercy of the short term market speculators and manipulators.

If the precious metals are insurance, do you place all of your assets in insurance?  Hardly.

I know it is especially tough on those who hold the miners.  They are a leveraged form of bullion ownership.  And what is worse is the great complacency which so many mining execs act towards their own shareholders. 

Not to mention the so-called metals analysts who will unqualifiedly claim that there is NO rigging in these markets, after the many scandals of the last five years showing that if there is money to be made in any market, it will be rigged.

Have a pleasant weekend.