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a true Golden Edge in a world of change.


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Wednesday was Constructive for Gold shares

Yesterday was not as negative for Gold as it looks at first glance

Day -GLD- : Chg : Pct% : volume / – GDX- : Chg. : -Pct% : volume – Low- / -GDXJ- : Chg. : – Pct% :

29: 125.20 – 0.38 : -0.30% 5.20M / $26.76 – 0.23 : -0.85% 22.2M : 26.66 / $42.50 : -0.98 – 2.25% :
30: 124.83 – 0.37 : -0.30% 5.55M / $26.47 – 0.29 : -1.08% 29.5M : 26.20 / $42.87 : +0.37 +0.87% :

Both GLD and GDX closed well above their lows, but still negative.

GDXJ, which often leads GDX and GLD closed Positive !

GDXJ Up +0.87% ! … update : GDX : GLD

[URL=http://s273.photobucket.com/user/jimolsen2/media/gdxj_zps06c50a25.gif.html][IMG]http://i273.photobucket.com/albums/jj235/jimolsen2/gdxj_zps06c50a25.gif[/IMG][/URL]


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Gold looks set for a Big Run up

Why do I say that?
In brief, because of the seasonal cycles, and the price structure.
Now let me explain this more slowly…
==
In mid-May with Gold prices at $1300, I put out a Video saying that I expected a MAJOR LOW in Gold before the end of July, with “$500 of easy upside.” To summarise my argument back then: I observed that there was a correlation between Gold prices and US debts.  And that this relationship had stayed in a long term relationship since at least 2000.  
 
[url=http://s273.photobucket.com/user/jimolsen2/media/GoldDebt_zps00fdf262.png.html]GoldDebt_zps00fdf262.png[/URL]
 
US Debts were rising steadily.  But Gold had shown some wild swings within an uptrend around the Debt.  First in 2011, Gold shot up too fast and traded at about $500 above the Debt correlation – as Gold rose to $1920.  Then gold fell for two years, reaching a low below $1200 at the end of 2013.  At that level, gold could rise by about $500 before it went back to its historical relationship to US Debt.  Right now, US Federal Debt is at about $17.6 Trillion.  Its historical relationship* suggests an equivalent Gold price of $1720 per ounce.  So with Gold presently at near $1300, there should be $400 of “easy upside.”  US Debt is rising at a Gold equivalent of perhaps $100 per year.  On top of that, it might swing to the Top of the channel, which could add another $500 or so. The Formula which I have derived from the charts suggests a Gold price of about $1900 at the end of 2015, or $2,400 if it swings to the Top of the Long term channel.
 
Gold%20Seasonal.jpg
 
Why did I say “the end of July”?  Because of seasonal cycles.  There is often a low in the Summer, usually in July or August.  And that seasonal cycle may be bottoming now, or sometime within August.  In my mind, this cycle is driven by seasonal factors, such as the Indian wedding season, and flows in and out of the Dollar.  It is only one factor pulling on Gold, and I think it is likely we have seen the bottom in Gold prices already.
 
[url=http://s273.photobucket.com/user/jimolsen2/media/elliott-wave-Stretched_zps694f9e5f.png.html]elliott-wave-Stretched_zps694f9e5f.png[/URL]
 
There is something called the Elliott Wave, which uses repeating price patterns to predict future price moves.  The biggest move is usually the third wave.  My own reading of the waves, backed up by the work of people like Gary Wagner suggests that wave 2, the corrective wave which precedes Wave-3 finished on Friday.  Friday brought a $14 move up in Gold, closing back over $1300.  It is interesting to note, that on Friday morning before the upthrust in Gold, we saw a rare negative -11 reading in the Ktico Gold survey*.  I believe that this survey was providing a nice contrarian indicator, suggesting the negative news may have already been priced into the Gold prices as it was trading down at about $1292 on Thursday, just before Friday’s strong price rally.
 
What could cause a Jump in the Gold price?  
I do not relying on predicting future events in my forecasts.  But neither do ignore them entirely.  I do note that there are now various big political stresses in the world. These include Israel’s conflict with Palestine, and continuing strife in the Ukraine. And I also note that the US economy may NOT be growing as fast as some have predicted.  If US growth comes in at BELOW the 3% that has been predicted for Q2, then Fed may not be so quick to end operation Twist, wherein it buys US T-Bonds. One economist, Gary Shilling has announced his own prediction this weekend that Q2 growth may have been 1% or less.  If this proves true, the news when it breaks could give a nice kick to the Gold price.  On top of these various foreseeable news drivers, are a whole variety of influences that are not predictable. The big point is, when the cycles are right, and price structure is right – as it seems to be now – it is much easier for any Gold-positive news to push the price higher.


Leave a comment

Gold looks set for a Big Run up

Why do I say that?
In brief, because of the seasonal cycles, and the price structure.
Now let me explain this more slowly…
==
In mid-May with Gold prices at $1300, I put out a Video saying that I expected a MAJOR LOW in Gold before the end of July, with “$500 of easy upside.” To summarise my argument back then: I observed that there was a correlation between Gold prices and US debts.  And that this relationship had stayed in a long term relationship since at least 2000.  
 
[url=http://s273.photobucket.com/user/jimolsen2/media/GoldDebt_zps00fdf262.png.html]GoldDebt_zps00fdf262.png[/URL]
 
US Debts were rising steadily.  But Gold had shown some wild swings within an uptrend around the Debt.  First in 2011, Gold shot up too fast and traded at about $500 above the Debt correlation – as Gold rose to $1920.  Then gold fell for two years, reaching a low below $1200 at the end of 2013.  At that level, gold could rise by about $500 before it went back to its historical relationship to US Debt.  Right now, US Federal Debt is at about $17.6 Trillion.  Its historical relationship* suggests an equivalent Gold price of $1720 per ounce.  So with Gold presently at near $1300, there should be $400 of “easy upside.”  US Debt is rising at a Gold equivalent of perhaps $100 per year.  On top of that, it might swing to the Top of the channel, which could add another $500 or so. The Formula which I have derived from the charts suggests a Gold price of about $1900 at the end of 2015, or $2,400 if it swings to the Top of the Long term channel.
 
Gold%20Seasonal.jpg
 
Why did I say “the end of July”?  Because of seasonal cycles.  There is often a low in the Summer, usually in July or August.  And that seasonal cycle may be bottoming now, or sometime within August.  In my mind, this cycle is driven by seasonal factors, such as the Indian wedding season, and flows in and out of the Dollar.  It is only one factor pulling on Gold, and I think it is likely we have seen the bottom in Gold prices already.
 
[url=http://s273.photobucket.com/user/jimolsen2/media/elliott-wave-Stretched_zps694f9e5f.png.html]elliott-wave-Stretched_zps694f9e5f.png[/URL]
 
There is something called the Elliott Wave, which uses repeating price patterns to predict future price moves.  The biggest move is usually the third wave.  My own reading of the waves, backed up by the work of people like Gary Wagner suggests that wave 2, the corrective wave which precedes Wave-3 finished on Friday.  Friday brought a $14 move up in Gold, closing back over $1300.  It is interesting to note, that on Friday morning before the upthrust in Gold, we saw a rare negative -11 reading in the Ktico Gold survey*.  I believe that this survey was providing a nice contrarian indicator, suggesting the negative news may have already been priced into the Gold prices as it was trading down at about $1292 on Thursday, just before Friday’s strong price rally.
 
What could cause a Jump in the Gold price?  
I do not relying on predicting future events in my forecasts.  But neither do ignore them entirely.  I do note that there are now various big political stresses in the world. These include Israel’s conflict with Palestine, and continuing strife in the Ukraine. And I also note that the US economy may NOT be growing as fast as some have predicted.  If US growth comes in at BELOW the 3% that has been predicted for Q2, then Fed may not be so quick to end operation Twist, wherein it buys US T-Bonds. One economist, Gary Shilling has announced his own prediction this weekend that Q2 growth may have been 1% or less.  If this proves true, the news when it breaks could give a nice kick to the Gold price.  On top of these various foreseeable news drivers, are a whole variety of influences that are not predictable. The big point is, when the cycles are right, and price structure is right – as it seems to be now – it is much easier for any Gold-positive news to push the price higher.
 
GDX / etf for Gold Miners … update
 
[url=http://s273.photobucket.com/user/jimolsen2/media/GDX_zpsdfca4347.gif.html]GDX_zpsdfca4347.gif[/URL]
 
In my earlier Videos, and on the GEI website, I mentioned some Gold stocks that I am tracking.  The main one is GDX, the Gold Miners index.  This index trade as low $20.52, on the last day of 2013. Then, it had a nice 36.6% rally into a mid-March at $28.03.  And then pulled back into a low near $22, just as I was releasing my second video, “The Bellwethers have Rung”.  That video proved very timely, and we saw a nice 26% rally to $27.78 by July 10th.  I call that wave-1, within a bigger structure.  Since then we had a xx% correction, which I call wave-2, and I believe that ended on Thursday at $25.95.  If I am right, then I would expect wave-3 to bring a rally of at least 26% to $33, and it could be much more than that.
 
The next few weeks and months could be very rewarding for Gold investors.
======
 
Federal Debt : $17.589 Trillion
+ State Govt. : $ 1.21 Trillion
+ Local Govt. : $ 1.92 Trillion
= Govt. Debt : $20.719 Trillion
====
Gold Formula : (Fed’l Debt – $4.0 Trillion ) x 119 +$100
====
History– : Fed’l Debt : – $4.00 : x 119 : + $100 : Gold-Ln : Differ.
End2015: $19.0 eTr. : $15.00 : $1789: $1,889 :
End2014: $18.2 eTr. : $14.20 : $1690: $1,790 :
06/30/14 : $17.63 Tr. : $13.63 : $1621: $1,721 : $1,315 : (406) :
12/31/13 : $17.35 Tr. : $13.35 : $1589: $1,689 : $1,202 : (487) :
06/30/13 : $16.74 Tr. : $12.74 : $1516: $1,616 : $1,192 : (424) :

Peak

09/06/11 : $15.22 Tr. : $11.22 : $1335: $1,435 : $1,895 : $460 :

 


Leave a comment

Gold looks set for a Big Run up

Why do I say that?

In brief, because of the seasonal cycles, and the price structure.
Now let me explain this more slowly…
==
In mid-May with Gold prices at $1300, I put out a Video saying that I expected a MAJOR LOW in Gold before the end of July, with “$500 of easy upside.” To summarise my argument back then: I observed that there was a correlation between Gold prices and US debts.  And that this relationship had stayed in a long term relationship since at least 2000.  
 
[url=http://s273.photobucket.com/user/jimolsen2/media/GoldDebt_zps00fdf262.png.html]GoldDebt_zps00fdf262.png[/URL]
 
US Debts were rising steadily.  But Gold had shown some wild swings within an uptrend around the Debt.  First in 2011, Gold shot up too fast and traded at about $500 above the Debt correlation – as Gold rose to $1920.  Then gold fell for two years, reaching a low below $1200 at the end of 2013.  At that level, gold could rise by about $500 before it went back to its historical relationship to US Debt.  Right now, US Federal Debt is at about $17.6 Trillion.  Its historical relationship* suggests an equivalent Gold price of $1720 per ounce.  So with Gold presently at near $1300, there should be $400 of “easy upside.”  US Debt is rising at a Gold equivalent of perhaps $100 per year.  On top of that, it might swing to the Top of the channel, which could add another $500 or so. The Formula which I have derived from the charts suggests a Gold price of about $1900 at the end of 2015, or $2,400 if it swings to the Top of the Long term channel.
 
Gold%20Seasonal.jpg
 
Why did I say “the end of July”?  Because of seasonal cycles.  There is often a low in the Summer, usually in July or August.  And that seasonal cycle may be bottoming now, or sometime within August.  In my mind, this cycle is driven by seasonal factors, such as the Indian wedding season, and flows in and out of the Dollar.  It is only one factor pulling on Gold, and I think it is likely we have seen the bottom in Gold prices already.
 
[url=http://s273.photobucket.com/user/jimolsen2/media/elliott-wave-Stretched_zps694f9e5f.png.html]elliott-wave-Stretched_zps694f9e5f.png[/URL]
 
There is something called the Elliott Wave, which uses repeating price patterns to predict future price moves.  The biggest move is usually the third wave.  My own reading of the waves, backed up by the work of people like Gary Wagner suggests that wave 2, the corrective wave which precedes Wave-3 finished on Friday.  Friday brought a $14 move up in Gold, closing back over $1300.  It is interesting to note, that on Friday morning before the upthrust in Gold, we saw a rare negative -11 reading in the Ktico Gold survey*.  I believe that this survey was providing a nice contrarian indicator, suggesting the negative news may have already been priced into the Gold prices as it was trading down at about $1292 on Thursday, just before Friday’s strong price rally.
 
What could cause a Jump in the Gold price?  
I do not relying on predicting future events in my forecasts.  But neither do ignore them entirely.  I do note that there are now various big political stresses in the world. These include Israel’s conflict with Palestine, and continuing strife in the Ukraine. And I also note that the US economy may NOT be growing as fast as some have predicted.  If US growth comes in at BELOW the 3% that has been predicted for Q2, then Fed may not be so quick to end operation Twist, wherein it buys US T-Bonds. One economist, Gary Shilling has announced his own prediction this weekend that Q2 growth may have been 1% or less.  If this proves true, the news when it breaks could give a nice kick to the Gold price.  On top of these various foreseeable news drivers, are a whole variety of influences that are not predictable. The big point is, when the cycles are right, and price structure is right – as it seems to be now – it is much easier for any Gold-positive news to push the price higher.
 
GDX / etf for Gold Miners … update
 
[url=http://s273.photobucket.com/user/jimolsen2/media/GDX_zpsdfca4347.gif.html]GDX_zpsdfca4347.gif[/URL]
 
In my earlier Videos, and on the GEI website, I mentioned some Gold stocks that I am tracking.  The main one is GDX, the Gold Miners index.  This index trade as low $20.52, on the last day of 2013. Then, it had a nice 36.6% rally into a mid-March at $28.03.  And then pulled back into a low near $22, just as I was releasing my second video, “The Bellwethers have Rung”.  That video proved very timely, and we saw a nice 26% rally to $27.78 by July 10th.  I call that wave-1, within a bigger structure.  Since then we had a xx% correction, which I call wave-2, and I believe that ended on Thursday at $25.95.  If I am right, then I would expect wave-3 to bring a rally of at least 26% to $33, and it could be much more than that.
 
The next few weeks and months could be very rewarding for Gold investors.
======
 
Federal Debt : $17.589 Trillion
+ State Govt. : $ 1.21 Trillion
+ Local Govt. : $ 1.92 Trillion
= Govt. Debt : $20.719 Trillion
====
Gold Formula : (Fed’l Debt – $4.0 Trillion ) x 119 +$100
====
History– : Fed’l Debt : – $4.00 : x 119 : + $100 : Gold-Ln : Differ.
End2015: $19.0 eTr. : $15.00 : $1789: $1,889 :
End2014: $18.2 eTr. : $14.20 : $1690: $1,790 :
06/30/14 : $17.63 Tr. : $13.63 : $1621: $1,721 : $1,315 : (406) :
12/31/13 : $17.35 Tr. : $13.35 : $1589: $1,689 : $1,202 : (487) :
06/30/13 : $16.74 Tr. : $12.74 : $1516: $1,616 : $1,192 : (424) :
12/31/12 : $16.43 Tr. : $12.43 : $1479: $1,579 : $1,664 : $085 :
06/30/12 : $15.86 Tr. : $11.86 : $1411: $1,511 : $1,599 : $088 :
12/31/11 : $15.22 Tr. : $11.22 : $1335: $1,435 : $1,575 : $140 :
09/06/11 : $15.22 Tr. : $11.22 : $1335: $1,435 : $1,895 : $460 :
06/30/11 : $14.34 Tr. : $10.34 : $1230: $1,330 : $1,506 : $176 :
12/31/10 : $14.03 Tr. : $10.03 : $1194: $1,294 : $1,410 : $106 :


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An Odd Gold Headline which does not ring true

Odd Headline (in the business section of the SCMP), which does not ring true:

GOLD’s CLIMB set to reverse as Bets Cut

Money Managers trim net long positions as gold price rally snaps,
investors still adding to holdings through ETP’s backed by metal

+ Hedge funds cut bets on a rally for the first time in six weeks’
+ Money managers trimmed their net long positions by 8.5 per cent in the week to July 15th.

“The gains are set to reverse as the the economy improves”
“We have probably already seen the extremes of positive sentiment in the Gold market”
– said Rob Haworth, at US Bank Wealth management

Hmm. Really?
Maybe not.
As the article pointed out, investors added about $251 million to Gold ETF holdings, including a $187.6 million gain in the five days to July 17th

It was the big selling by etf Holders that drove down prices in 2013*, so maybe we should pay more attention to these smaller investors, rather than high profile Hedge Funds, who swing money back and forth very quickly

*SPDR Gold Holdings shed 17.78 Million ounces in 2013

Date—– : GLD-last: Gold-Mid: Tonnes: x32,150
12/31/12 : $162.02 : 1664.00 : 1,351.0 : 43.44 million oz.
12/31/13 : $116.12 : 1205.32 : 0,798.2 : 25.66 mn
07/21/14 : $126.34 : 1311.60 : 0,803.3 : 25.83 mn
> http://www.greenenergyinvestors.com/index.php?showtopic=18018&page=1


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Long term technical indicators : “Helpful” or “Pesky” ?

Here are two Major Technical indicators I follow. They are unique to GEI

The “Fed Race Track” … update

FRT_zps9b7bcb70.gif

… shows SPX battling a tough resistance level, as Gold has made a nice “bullish”

Reverse Head-and-Shoulders formation.

The “Early warning signal”, LQD-to-TLT … update

lqdetc_zpsd5a8b229.png

Looks like there’s another warning signal.

You may think this has given false signals, until you see:

RUT / Russell-2000 … update

RUT_zps0d88ed38.png

… which represents the broader market.

If the latest signal is correct, it is a good time to be alert to further downside,


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A NOTE on the New Development Bank: How much Gold?

NDB will be : “Housing the gold”, as one article put it

Interesting isn’t it, to read that Russia, India, Brazil, and China… are now happy to keep “their” wealth in Shanghai
If the NDB goes out and buys $50 BIllion of Gold, or the founding countries buy Gold to contribute their capital in that form, how much Gold is that?
It is interesting compare this amount with the Holdings of Gold by the SPDR Trust, latest figures are:
====
GLD – latest: $127.09 / Gold: $1,318.80
Held : 803.34 Tonnes = 25.83 Million Oz.
Value : $33.63 Billion
> http://www.spdrgoldshares.com/usa/historical-data/
=====
$ 50.0 Bn / $33.63 Bn = 1.49x as much

So $50 Billion is 38.4 Million Ounces, or roughly 1.5x as much as SPDR Gold holds.
That is a lot of Gold! And if the go out and buy it in the market, watch the price Jump !