Gold and Gold Stocks – Patterns, Cycles and Insider Activity, Part 2

Cycles and Sentiment
Another recurring pattern consists of the seasonally strong period in gold around the turn of the year, which is bisected by a mid to late December interim low in the gold price. An additional boost can be expected in January and Feburary from the strong seasonal uptrend in silver and platinum group metals as well (to see the seasonal PGM charts, scroll down to our addendum to this recent article by Dimitri Speck).
Rallies in silver tend to be quite supportive for precious metals stock indexes, as silver stocks have an even higher beta than their gold brethren (note in this context that the XAU is the more broad-based of the two indexes these days and contains far more silver stocks than the HUI – see these lists of the current XAU and HUI constituents for details).
Below is the 20-year seasonal gold chart, with the period from the December 20 interim low to the late February peak highlighted. Note that the statistical data shown on the chart refer specifically to the highlighted period, which in turn is an average of the action at this time of the year over the past 20 years.
Obviously, there are years in which no gain is achieved in the seasonally strong period, but over the past 20 years the probability that prices would rally was 70% (14:6 = 7:3). Moreover, while the gains in profitable years ranged from +8.52 to +17.98%, losses were much smaller, confined to a range of just -1.60 to -3.30%.

This post was published at Acting-Man on December 28, 2017.

The Bitcoin Effect

Merry Christmas to our American friends. Happy Christmas to the rest of the Anglosphere. Felicem natalem Christi to our Latin-speaking audience, and gr jl to those who are reviving Old Norse as a great language!
Let’s address two themes about the gold price trend that are increasingly in popularity the past few months – as the price of gold has been falling. Blame bitcoin. And blame rising interest rates.
There is no direct mechanism – no arbitrage – that pushes up bitcoin and down gold. As there is, for example, with changes in relative palladium or platinum demand if diesel engines gain or lose market share from gasoline engines.
Nor do we give truck to the idea that the dollar has been pushed from 1.00 to 0.000053 (we don’t think even the bitcoin bugs who say it, really believe it). What are you going to believe: a B. S. theory, or your own lying eyes?
There is arguably an indirect bitcoin-gold price connection mechanism. Those who own gold for the price appreciation may be attracted to bitcoin. While gold does not seem to be going up, bitcoin obviously is. If someone wants to make dollars quick, bitcoin sure seems to be a better vehicle to ride than gold.

This post was published at GoldSeek on Tuesday, 26 December 2017.

Palladium – The Metal for the Discerning Speculator, or The Simple Way of Doubling Profits in Palladium

Misbehaving Metals
In past issues of Seasonal Insights I have discussed the very odd behavior of a variety of instruments in the course of the typical week: in issue 17 the topic were intra-week moves in S&P 500 Index, and in issue 18 the no less interesting intra-week pattern in Bitcoin.
In issue 22 I moved on to the ‘Strange Behavior of Gold Investors from Monday to Thursday’, which was followed by an examination of the associated pattern in silver a week later.
Several readers asked me whether a similar pattern could be observed in platinum and palladium as well. Is the action in these metals on Friday standing out, as it does in gold and silver?
Let us take a closer look. O

This post was published at Acting-Man on December 21, 2017.

Gold’s Shooting Star and Its Implications

After three weeks of declines, gold finally moved higher last week. Was this move surprising? Not at all, if you read our analysis of the previous week’s huge decline in platinum. The sizable slide in the latter was likely to trigger at least a small rally and that’s what we saw last week. However, gold reversed quite clearly on Friday and shooting star candlesticks, as these sessions are called, are signs of a reversal. Did we see one?
That’s not likely. There are several reasons not to believe the shooting start in gold. Let’s take a look at yellow metal’s chart for details (charts courtesy of

This post was published at GoldSeek on 18 December 2017.

SWOT Analysis: Many Gold Traders Bullish After Federal Reserve Rose Rates

The best performing precious metal for the week was palladium, up 1.71 percent. Automobile replacement was up due to water damaged cars post hurricane season. Catalytic converters containing palladium will enter the recycling phase. A Bloomberg survey of gold traders shows most are bullish on the yellow metal after the Federal Reserve raised rates earlier in the week. This is in part due to gold advancing for the first time in four weeks as the Fed stuck to its projection of three hikes in 2018, writes Ranjeetha Pakiam of Bloomberg. The European Central Bank left its policy rate unchanged, leading Bloomberg Intelligence analyst Mike McGlone to suggest that relative value and mean reversion might lead to gold outperforming bitcoin and the U. S. dollar. Gold counter-intuitively rallied the last five times the Fed raised interest rates, leading some to believe gold has no reason not to rally again. Pure Gold Mining Inc. announced the addition of mineral resources to two of its mines in Ontario. The estimate includes an additional 96,000 ounces of indicated resources and 118,000 ounces of inferred resources. CEO and President of the company, Darin Labrenz, said the addition has ‘strong potential to positively impact project economics.” Weaknesses
The worst performing precious metal for the week was platinum, up just 0.57 percent post the rate hike but not out of favor completely as Sibanye Gold made an all-share takeout offer for Lonmin which has been on the ropes for several years now. The Democratic Republic of Congo changed its mining code again with details still emerging. The last time the nation changed its code it resulted in increased royalties, tax rates, minimum unpaid share of new mining projects and now, for large projects, 10 percent of a mine’s shares must be owned by a Congolese investor.

This post was published at GoldSeek on Monday, 18 December 2017.

SWOT Analysis: Is Gold Set to Rise in 2018?

The best performing precious metal for the week was palladium, but it clocked in with a price decline of 1.41 percent. In an interview with Sharps Pixley’s Lawrie Williams, precious metals specialist Ted Butler said his analysis shows that, for at least the past nine months or longer, Goldman Sachs and JPMorgan Chase are taking 80 percent of all COMEX physical deliveries of gold and silver. Butler believes that someone would only take delivery if you thought the price was going to go up in value. A Shariah-compliant gold ETF targeting Malaysian institutional investors will be made available by Affin Hwang Asset Management. The ETF was listed on the Kuala Lumpur stock exchange on Wednesday. Traders are still reluctant to bet against gold even with impending tax cuts and rate hikes, thought to be negative for the yellow metal. Bearish positions on bullion futures and options were at a five-year low last week. Weaknesses
The worst performing precious metal for the week was platinum, down 5.53 percent. Traders surveyed were overwhelmingly bearish ahead of next week’s Federal Reserve rate hike expectation. The world’s second biggest market for gold, India, reported a third consecutive month of decreased imports. Additionally, Australia’s Perth Mint reported gold sales of 23,901 ounces last month, about half of the prior month’s volume

This post was published at GoldSeek on 11 December 2017.

Friday’s COT Report: A WTF Moment For the Ages?

09 December 2017 – Saturday YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM The gold price was up a dollar or so in Far East trading on their Friday, but was turned lower once London opened. That tiny downturn lasted until at, or shortly after, the 10:30 a.m. GMT morning gold fix in London – and the price began to tick higher from that point. The big price slam that I was expecting on the release of the jobs numbers never materialized, but the volume between 8:30 and 10:00 a.m. in New York yesterday was amazing. That tiny rally in gold was capped and turned lower starting around 9:40 a.m. EST. That tiny sell-off ended at precisely 1:30 p.m….which was the COMEX close. That tick is not visible on the Kitco chart below, but stands out clearly on the New York Spot [bid] chart. From that juncture the price began to creep higher until shortly after 3 p.m. in the thinly-traded after-hours market – and it didn’t do much after that.
The low and high ticks certainly aren’t worth looking up.
Gold finished the Friday session in New York at $1,248.20 spot, up $1.40 on the day, but a new intraday low was set just after 8:30 a.m. in New York, albeit not by much. Considering the ‘quiet’ price action, net volume was pretty heavy at something under 263,000 contracts, with at least 54,000 contracts of that amount coming between 8:35 and 8:50 a.m. EST. One wonders what that was all about – and in light of yesterday’s dramatic changes in Friday’s COT Report, I’m now ultra-sensitive about things like yesterday’s price activity.

This post was published at GoldSeek on Monday, 11 December 2017.