Gold has traded between $1,066 and $1,076 so far today…as of 10:00 am Pacific, bullion is down $8 an ounce at $1,069…Silver has retreated 8 cents to $14.12…Copper has slipped another 3 pennies to $2.06, hitting a new 6.5-year low, while Nickel has fallen to its lowest level since 2003…Crude Oil has gained 34 cents to $42.24…the modest lift comes after Saudi Arabia said in a statement today that the kingdom remained ready to work with other producing and exporting countries to stabilize prices…it’s hard to believe, however, that the Saudis will bow to any pressure to reduce their own output…for them, the last 12 months has been about trying to put the squeeze on others while boosting their market share…the U.S. Dollar Index is up modestly at 99.81 and hit a 7-month high in early trading…
Between November 13 and Thursday, global Gold ETPs had 2.9 tonnes of inflows, ending a consistent outflow since early November, according to Barclays. “We expect light flows in and out of Gold ETPs at the current price level,” the bank says…
“Since 2013, Gold ETP investors appear to redeem ETPs when prices move below their initial purchase prices. This behavior is shown by the matching amounts of Gold ETPs between the amount purchased and redeemed in the same price brackets. Only 90 tonnes of Gold ETPs were purchased at $1,000–1,100/oz by our estimation. This suggests that only small amount of holdings would be affected by price moves within the current range. However, we estimate that 716 tonnes of Gold ETPs were purchased at $900–1,000/oz. Gold could face selling pressure if prices move below $1,000/oz, in our view,” Barclays concluded…
Good sign – large speculators, typically on the wrong end of the trade, flipped to a net-bearish position in Gold futures for only the second time ever in one Commodity Futures Trading Commission report, while further slashing their net long positions in another, according to the most recent data compiled by the government agency…you know Gold is gearing up for a rally when you see the large speculators become so bearish, while the smart-money commercials are accumulating…
Gold And Geopolitical Events
According to an RBC report released today, while the effects of geopolitical events have historically pushed Gold prices higher, this no longer seems to be the case. “We can see that while Gold appears to have been a safe haven historically, moving higher after these geopolitical shocks, this seems to have broken down as the Gold price has not been affected by events in recent years,” the report states…
Using the late 1979 Soviet invasion of Afghanistan as an example, RBC notes that Gold prices moved from $475 an ounce to $600…meanwhile, the recent Greek debt crisis as well as last week’s Paris terrorist attacks had little impact on the price of Gold. “This may be attributed to the significant increase in liquidity and access to physical Gold as coins, bars, and ETF products,” RBC concludes. “As a result, we believe that geopolitical events no longer serve as a near-term driver of the Gold price, which appears instead to be overwhelmingly driven by the global macroeconomic backdrop and sentiment.”
Gold 6-Month Daily Chart
If you’re a contrarian, there are reasons for encouragement here as very oversold conditions emerged this month in the yellow metal and are now beginning to abate…support has held around $1,065 which is also close to the bottom of a downsloping channel on our very reliable longer-term 2.5-year weekly chart…the Fed has done everything to prepare the markets for a rate hike next month, so current Gold prices have already “baked in” that probability which sets up conditions for a rally going into year-end…
In today’s Morning Musings…
1. Has Silver found a bottom?…
2. A 20-year look at the NASDAQ – new highs on the way?
3. Interesting technicals for one of the Venture’s current volume leaders, Convalo Health International (CXV, TSX-V)…
4. Last year’s 70-cent high-flier with no bid now – a sign of the times in the Oil patch…
Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…
Hi John and Jon,
What are your thoughts on the interview with the EQT CEO on the korelin?
Comment by 02charoc — November 23, 2015 @ 10:55 am
GGI trading very nice. Bounced off the bottom of the up sloaping channel and now heading higher. Let’s see if it breaks out above the top of the channel.
Comment by Tony T — November 23, 2015 @ 1:08 pm
YFI is waking up from the dead.
Comment by dave — November 23, 2015 @ 1:18 pm
I wonder who that astute investor is: haha, just kidding, but thank you Jon.
Many members on this board seem to be long term investors, and I believe everyone knows why I can’t be. This being said, YFI has woken up but I wouldn’t chase it. .20 should be new support. LONG TERM: this is a no brainer.
As for me, I am waiting on either assays from GGI (yes, I know that I can miss the move in between) or a situation to develop with EQT.
Comment by dave — November 23, 2015 @ 1:37 pm
Dave I was reading about W bottoms with Bollinger bands, thanks for bringing it up. I’m very interested in TA and have much to learn.
Comment by jasi — November 23, 2015 @ 6:01 pm
Jon when will you give us your take on grade nb for the gold magnetite pyrite structure, This could be a monster gold deposit as it is open in all direction, graph look strong an preparing for the next leg up, just don’t know the grade as it is not exactly the same mixure than golden bear mine.
Comment by Martin — November 23, 2015 @ 8:23 pm
Your welcome Jasi
Comment by dave — November 23, 2015 @ 9:31 pm
The dark pyrite-magnetite mafic structure, Martin, is fascinating – includes high temperature alteration, in some cases very intense quartz veining with sulfides, even magnetite oxidizing into hematite. It’s not just grade but mineralization type(s) – the geos are really, really intrigued by this, as Regoci mentioned in our interview. You’re right, this could be a stand-alone gold system, and the structure has been intercepted in drill holes 800 meters apart. I do want to sleep tonight, so I don’t want to speculate about grade at the moment…the potential volume is very obvious. What Kaketsa has cooked up here, the assays will provide the answer. I believe it is something unique to the district as we’ve known it the past 2 and a half years, driven specificially by Kaketsa.
Comment by Jon - BMR — November 23, 2015 @ 9:37 pm