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Gold: It is Still a Bull Market

thetechnicaltake's picture





 

I am not sure what all the fuss is about. Yes, the SPDR Gold Trust (symbol: GLD) is down about 15% from its September high, but technically and fundamentally, gold is not broken. Period.

Most noteworthy is "commodity expert" Dennis Gartman's call that "we have the beginnings of a real bear market, and the death of a bull.” You can read more about Gartman's call on gold by going to this article on Bloomberg: "Death of Gold Bull Market Seen by Gartman", and Gartman was also making the rounds on CNBC as seen in this video.

 

Curiously, I really don't understand what Gartman is talking about. He sold is personal stake in the metal, but he is still invested in gold for his clients. I wouldn't be happy if I was that client. I guess he is only bearish for himself and not his clients.

We also have this article from MarketWatch: "Gold top was easy to see". Yes, it was so easy that I am now making the "call", and oh by the way, that "call" is about 2 months too late. Note to author of article: if it was so easy, then why weren't you short 2 months ago?

Technically, the gold bull market remains intact. This can be seen by the monthly chart of GLD, which is shown in figure 1. The pink colored price bars are negative divergence bars. 5 months ago, GLD tried to breakout of that trend channel and go parabolic, but that move wasn't to be as prices fell back into the trend channel. While failed breakouts are ominous, GLD is still within a rising trend channel and this is bullish. Looking at the negative divergence price bars, we note a cluster of these over the past year. This is a sign of slowing upside momentum not a sign of a market top. If prices close below the low (at 154.19) of the most recent negative divergence bar (0n a monthly closing basis), then it would be a market top. This would likely coincide with a close below the lower channel line. These events have not happened yet.

Figure 1. GLD/ monthly

A longer term view supports the notion that the gold bull market is not over. In future articles, I will review the bullish fundamentals and get more granular on the technicals as I view this as a buying opportunity!

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Wed, 06/20/2012 - 18:15 | Link to Comment GlomarHabu
GlomarHabu's picture

Gold fluctuates,as does everything else.  Gold however has thousands of years of valued history. Nothing else comes close,nothing.

The elites, the financial press, and governments hate gold for the independence it brings to it's owners .... it's really quit simple. Do you trust gold or fiat currency and manipulated stock and bond prices over the long run? Yes gold markets are manipulated too but they'll never erase it's psychological attraction.  Can anyone say the same for Enron et. al.?

Wed, 12/14/2011 - 17:59 | Link to Comment Old Poor Richard
Old Poor Richard's picture

As many people chimed in, it just crashed through the 200 day MA.  It hasn't done that since 2009.  May not be the end of the gold bull market, but it is a big deal, and was unexpected (by those who didn't orchestrate it).  Like the Spanish inquisition.

http://finance.yahoo.com/q/ta?s=GLD&t=2y&l=on&z=l&q=l&p=m200&a=&c=

Let's look at this realistically.  PMs are a tiny, tiny part of the "world" portfolio.  When the asshats who trade by the billion decide to move out of a sector, it causes a bit of an earthquake.  But the VALUE of PMs is undiminished. 

We are NOT going to see deflation (lowering of prices of retail goods and foodstuffs).  We're going to see a slight pull back in materials/commodities, and in PMs. 

Fundamentals haven't changed.  Zimbabwe Ben absolutely will not pull money back off the table, it would be a political disaster for the Ponzi masters.

 

Wed, 12/14/2011 - 17:07 | Link to Comment HANKREARDON
HANKREARDON's picture

Bring on the margin hikes in 1...2....

Wed, 12/14/2011 - 16:43 | Link to Comment Dangertime
Dangertime's picture

Sell gold at your own risk.

 

Now is the time to be buying.....especially with all of the blood in the streets and the declaration of the end of the gold bull market.

 

This is not how bull markets end.  This is how they take a breather, gathering strength for the new highs to come.

Watch for gold to base over the next 12-18 months between $1500 and $2000.  It will make higher lows over that time while continually bumping that $2000 ceiling.  Eventually it will break through that ceiling and on to new highs.

 

In the meantime, load up on the cheap.

Wed, 12/14/2011 - 15:41 | Link to Comment delivered
delivered's picture

In March of 2008, gold was at roughly $1k USD and then dropped back to $720 +/- by November (for close to a 30% correction). This time around, gold was in the $1,900 +/- range and is now down to the $1,570 range or down about 20% +/-. Of course in 2008 we saw the start of the collapse of the financial institutions which played out into early 2009. This time around, the collapse is with European countries as everyone knows Greece is done with other countries standing in line. Again, the flight to the USD and USTs is being driven by panic and not fundamentals as everyone also knows that the worst offender on the debt front is the US ($15+ trillion and counting).

So if you believe that austerity measures and the the deflation scenario plays out and the USD will continue to strenghten, then PMs look great as if deflation takes hold, the tax base in all countries will continue to contract leading to fewer receipts, increased trouble servicing soverign debt, and a quicker path to default on debt and eventually, currencies losing significant value. Can't wait to see how the US services its debt with a contracting tax base and ever increasing deficits.

Or if you think the FED and the ECB will step in and begin to provide liquidity, PMs look great as everyone throws in the towels and realizes the only alterative is to inflate their way out of this mess and paper over the outstanding debt.

So pick you poison but remember to be patient as if gold does correct by 30%, the new bottom will be roughly $1,350 (of course paper only). What this will tell the world's central bankers is that they will have the green light to print again.

Remember to be patient young Skywalker as for every real gold investor since 2001, looking for the dips to load up again with 30% corrections is where the real money is made.

Wed, 12/14/2011 - 16:03 | Link to Comment I think I need ...
I think I need to buy a gun's picture

oh fuck dennis gartman that lieing piece of shit if only he would tell a 1/4 of the truth, what i can tell you is that the trend broke for the first time since beginning of 09 and i have been watching the gld the whole time and how it acts..........no heavy volume either like a flatline......all i can tell you is this is probably the beginning of what everyone has been waiting for on this blog, what i can also tell you is my dad is going to be very rich with ss/federal pension if the dollar stays strong!

Wed, 12/14/2011 - 15:10 | Link to Comment GoldenGal
GoldenGal's picture

Is this the day gold dies?

Wed, 12/14/2011 - 15:00 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Even simpler than that. Is the mirror image of Gold which is Dollar and Treasury done with its bear market, or close to the end of deleveraging?   I guess the answer to easy to be bearish on GOLD.

Wed, 12/14/2011 - 14:55 | Link to Comment MFL8240
MFL8240's picture

The Federal Reserve banking cartel in the US has done damage to every person holding Gold and here are the facts;

1.  The Federal Reserve forced the CME to hike margins on Silver 8 times and on Gold 6 times even when they were going down. Set in motion what we have been watching for the past 4 days.

2.  When Gold hit $1775 last week on its way to $1800 decoupling from the junk USD fiat trash, again the tribe stepped in along with the corrupt bank of Rothschild in England and the BIS and dumped Gold contracts.  

3. When the dumping began by the fed was further fueled by the financial media controlled by these same banking gangsters, the game to destroy Gold was perfectly set up and the margin squeeze began.

NOTHING CAN BE BELIEVED AND NO ONE IS SAFE.

Thu, 12/15/2011 - 03:36 | Link to Comment nhr215
nhr215's picture

Do you're thesis is that "the Rothschilds" called "the Fed" who told CME to raise margins? Then "the jews" in the media promoted this.... 

Can I recommend you stay in your bomb shelter and get back on the Risperidal or whatever other antipsychotic you should be taking for your paranoia.... I promise the bombshelter will keep you safe from the Illuminati-Jewish-Banking-Cabal-Satanic-Overlords-For-One-World-Government or whatever other psychotic delusional conspiracy you belive in...

 

Wow zerohedge really has a knack for attracting the unhinged and mentally unbalanced! Its funny actually.... This post could be a poster-child for Paranoid Personality Disorder... 

Wed, 12/14/2011 - 14:22 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

If you want to know gold's future then look at copper and silver.

Wed, 12/14/2011 - 15:17 | Link to Comment covert
covert's picture

only a fool would short gold.

http://expose2.wordpress.com

 

Wed, 12/14/2011 - 16:28 | Link to Comment jeaton
jeaton's picture

This "fool" is having a good day.  BTW, I am also long the dollar and short the S&P.  Guess that makes me a bigger fool. 

Wed, 12/14/2011 - 14:18 | Link to Comment SWRichmond
SWRichmond's picture

"Technicals" don't matter.  They only matter, and even then only slightly, in a functioning market environment.  This market environment is not functioning; it's not even really a market, is it?  All of you who are watching the Fed paint a chart are fools.  You see a chart with a bunch of lines drawn on it to try to make it mean something; I see a sign at the PM store that says "SALE!"

Wed, 12/14/2011 - 14:12 | Link to Comment therearetoomany...
therearetoomanyidiots's picture

CNBC is all you need to know.  Manipulate the morons to support the market so Obama gets re-elected.

Kramer told me that Gold is on the down....what does that mean???

Buy now!

Wed, 12/14/2011 - 13:42 | Link to Comment Faceman78
Faceman78's picture

rumours of margin hikes!!!

Wed, 12/14/2011 - 13:33 | Link to Comment garyw
garyw's picture

Will Gold drop or Silver increase to close the margin?

Wed, 12/14/2011 - 13:24 | Link to Comment clones2
clones2's picture

Im as bearish as they come... but come on.  The Gold chart is broken!  First time below the 200dma in 3 years today!  The more it falls I guess the more it is on sale....  And the lower it drops - TA guys (which I am a fan of) - keep coming up with a bigger number for support! :-)  50dma support, then 100, then 150, then 200dma was HUGE support...  that's gone.  So now we are moving to MONTHLY charts and talking about the 250dma.

Yes - Gold is a great investment long-term.  I have now started buying silver as well.

But TECHNICALLY - what this article is all about after all - It looks like we could still see a significant selloff in gold and silver before the next bottom.

Wed, 12/14/2011 - 16:34 | Link to Comment Quinvarius
Quinvarius's picture

You use TA on gold?  In a currency collapse?

Wed, 12/14/2011 - 17:15 | Link to Comment RockyRacoon
RockyRacoon's picture

It would be pretty funny, really, except for the fact that most of the "traders" use the charts, and thereby affect price movement.  A sad state of affairs.    Using a weather-vane in a hurricane ain't much use.

Wed, 12/14/2011 - 17:23 | Link to Comment akak
akak's picture

Some might compare it to using a Ouija board during a train wreck.

Wed, 12/14/2011 - 14:23 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

$750

Wed, 12/14/2011 - 13:29 | Link to Comment Faceman78
Faceman78's picture

sensible post.

Wed, 12/14/2011 - 13:17 | Link to Comment ebworthen
ebworthen's picture

Gold is on sale!!!

Gartman is a tool, he worships at the temple of the holy paper mill.

Wed, 12/14/2011 - 15:39 | Link to Comment akak
akak's picture

Plus, he's fat and ugly, and has a cheesy half-assed beard.

He looks like a classic child molester.  Or a homeless drunkard.  Or both.
I wouldn't be surprised if his pants reeked of dried urine (after regularly pissing himself after all his innumerable and spectacularly wrong calls on gold for literally years now).

Gartman is a complete joke.  CNBC is truly worthy of his "advice".

Wed, 12/14/2011 - 16:52 | Link to Comment web bot
web bot's picture

Hey Mr. A... you're in fine form today! Good to see you posting. I wouldn't want to see you get angry at Gartman!!! lol

I'm praying silver drops to sub $20 and I'm loading up for 1,000 oz.

Wed, 12/14/2011 - 17:30 | Link to Comment akak
akak's picture

Hey wb!  Nice to see you still around!

Well, you know, I have to beat up on SOMEBODY now that our dear little leo has fled (or been banished from) the ZH scene.

(There's always RobotRetard, of course, but as he is a blatantly cowardly troll and NEVER responds to any responses or criticisms, no matter how cogent or justified, it is just not as satisfying.)

I just wonder if little leo is still being wined and dined by all his kneejerk statist, pro-corruption, pro-status-quo buddies?

Wed, 12/14/2011 - 13:12 | Link to Comment redytogo
redytogo's picture

Buy! Buy!

Wed, 12/14/2011 - 13:12 | Link to Comment The Fonz...befo...
The Fonz...before shark jump's picture

do you see all these blow drys on cnbc practically doing chest bumps celebrating the demise of gold Bit premature if you ask me...this is a full front bash to play on fears and to scoop up gold at discounted prices...

 

I ask you this what has changed in the world since the september highs? nothing if anything things are a lot worse....

 

 

 

Wed, 12/14/2011 - 16:31 | Link to Comment buyingsterling
buyingsterling's picture

Precisely. Traders from Goldnan's Sack are screaming about silver and gold to sell, but they have none. There's no material reason for this plunge; to the extent it's connected at all to market fundamentals it's about covering leverage elsewhere - another market sickness.

TPTB have to drive gold down to justify more QE, or at least to make it easier to justify. Then when gold soars on QE, the news is crowded out by the rise in equities. Everyone's richer, economy fixed, everyone can go back to sleep.

When things look grim, I recall that in 1970, the US had enough gold on hand to back its money. 40 years later, Bernank admits that there is not enough gold on the entire planet to back all the dollars - at a price which is about 45 times what it was in 1970.

Wed, 12/14/2011 - 17:12 | Link to Comment RockyRacoon
RockyRacoon's picture

The Privateer - Number 691 Page 4
*How A Little Became A Lot:*
From the distant vantage point of late 2011, the $32 Billion in US Dollars held by global central banks in
mid 1971 seems unbelievably low. The problem - for the US and the global monetary system - was that
the US Treasury only held 261 million ounces of Gold at that time. At $US 35 per ounce, 261 million
ounces was “worth” a mere $US 9.135 Billion. That’s less than 30 percent of the foreign US Dollar
central bank holdings still officially “redeemable” in Gold.

In mid 1971, the US had two choices. The first was to increase the official ratio between the Dollar and
Gold to cover these foreign holdings. That would have required a US Dollar/Gold ratio of a bit less than
$US 125 per ounce. It would also have required an immediate cessation of US government deficit
spending and of Federal Reserve interest rate manipulation. The other choice was to repudiate Gold
redemption altogether. That was the choice taken, and that is the reason why the world now faces an
insoluble and all but incalculable fiscal, financial and economic morass. That $US 32 Billion in US
Dollars held in foreign central banks has become multiple $US TRILLIONS today. The US Treasury
updates what it calls its “intergovernmental holdings” of US Dollars on a daily basis. At the end of
October, those holdings totalled $US 4,738 Billion. The Treasury still lists its Gold holding at about 261
million ounces. In mid 1971, it would have taken a Gold “price” of $US 125 to cover all central bank
holdings of US Dollars. In late 2011, it would take a Gold “price” of $US 18,155 to do the same job.

In mid 1971, the fixed Gold price of $US 35 per ounce would have needed to be multiplied by just over
3.5 to cover foreign central bank held US “assets”. In late 2011, the current “market” Gold price of $US
1770 (as of November 9) would have to be multiplied by 10.25 to perform the same function. And that is
with a Gold price which is already more than 50 times higher than it was in mid 1971.

What was a “rounding error” in 1971 has become an all devouring fiscal monster 40 years later.

Wed, 12/14/2011 - 12:53 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

If you're holding gold or GLD as a short-term (< 3 years) trade, good luck hanging on to your sanity.

If you're holding physical gold for preservation of buying power, you sit tight and ignore the gyrations, which many have warned would occur as crises ebb and flow and the Big Unwind sets in.  Oh, and don't forget that the CBs are manipulating the metals in order to "scare" retail holders into shedding their stacks.

Gold is not really in a bull market, and never was.  It's always really been worth the same thing.  It's everything else that is moving.  CNBS and all the other pundits still think the sun revolves around the earth.  :D

Wed, 12/14/2011 - 13:28 | Link to Comment Faceman78
Faceman78's picture

correct.

people should take a cursory glance at the dollar index over the past few days.

Wed, 12/14/2011 - 12:52 | Link to Comment Grand Supercycle
Grand Supercycle's picture

GOLD BEAR MARKET:
Originally posted Feb 16, 2011
“When DOW/S&P500 correction gathers momentum I expect:
UP ~ USD, various USDXXX currencies, VIX Index
DOWN ~ EURUSD, AUDUSD, NZDUSD, GOLD/SILVER, Base metals
like COPPER etc, CRUDE OIL”

Wed, 12/14/2011 - 15:40 | Link to Comment Smiddywesson
Smiddywesson's picture

Yup, you did say that, and yup I called you out on it and was completely wrong.  Good job.  I wish I listened to you.  The USD is king of this paper hill and until the system collapses, it will reign supreme.  This is a false reality, not a market, and gold can be kept down right up until the end.  That's an easy call on my part, because if they lose control of PM prices, it IS the end.  In fact, TPTB will use everything they have without restraint at the end, because by then the supression of paper gold scam will be at an end anyway.  So we are likely to see at least one more dive in gold and silver prices before the end, and it will be a big one.

Wed, 12/14/2011 - 12:46 | Link to Comment InconvenientCou...
InconvenientCounterParty's picture

The unwind of paper derivatives with (only) notional value including GLD should be expected to play havoc with markets higher up the "physical" food chain. This dislocation is where the real arb gets done.

Wed, 12/14/2011 - 12:46 | Link to Comment Faceman78
Faceman78's picture

and yes, I also concur... there will certainly be a time to reload on long GOLD when it settles and rebases at the 200MA and long term trendlines (sit circa 1300-1450)

Wed, 12/14/2011 - 12:44 | Link to Comment Faceman78
Faceman78's picture

Are you serious?

If you even cared to listen to what Gartman says, instead of hearing what you wish to hear, he very clearly states he cannot sell his clients GOLD positions until end of the month due to various investor covenants.... but if he could "he certainly would"

This is another article that clearly demonstrates a total lack of awareness of the real plight of the financial markets.

The author is so bloody minded with his own view that he takes no attention of all the real signals.

Dangerous and very ignorant.

Wed, 12/14/2011 - 12:55 | Link to Comment thetechnicaltake
thetechnicaltake's picture

Actually Faceman if you really listent to the interview, he had several months to get out of his position as he is talking about how bearish the market was back in August, but apparently he failed to act on behalf of his clients

 

Wed, 12/14/2011 - 13:27 | Link to Comment Faceman78
Faceman78's picture

The insinuation in this article is clearly linked to his current call, not his previous call.

Maybe you should be a little clearer in your future articles in terms of linking.

Wed, 12/14/2011 - 12:42 | Link to Comment ChitownTrader
ChitownTrader's picture

I said this last week and like 20 people on ZH attacked me!!! I told you guys silver would fall first! So next time you talk shit about me or Chicago, do a little research and perhaps taken an econ 101 class. Agreed though, wait for it to settle and buy back gold.

Wed, 12/14/2011 - 16:23 | Link to Comment buyingsterling
buyingsterling's picture

About half of investors think it's going down on any given week. You're no genius. And Chitown _IS_  SHIT TOWN. Like I never tire of saying, you lot like your women defenseless and rape-ready. Watch for the next false flag to be in SHIT TOWN, so that the feds can pour billions in, in a futile attempt to save it from the morons who dwell there.

Wed, 12/14/2011 - 12:55 | Link to Comment mayhem_korner
mayhem_korner's picture

wait for it to settle and buy back gold.

 

Buy 'back' gold?  If my physical stack has a WAC of $885, why would I have sold any of it in the first place?

Wed, 12/14/2011 - 16:08 | Link to Comment Boston
Boston's picture

Do both.

 

1. Build and maintain a core holding, one that you never sell.

and

2. Trade a separate account. Buy on major sell-off phases (like the one we're going into now); sell during blow-off tops (ala Aug/Sep for Au or April for Ag).

 

Personally, I sold many of my junk silver coins mid-year (at 38-48); right about now (28 and every 2 down) I'll be buying back bars. And I'll buy back more ounces than I sold---to pad my core holdings, and to rapidly expand my trading holdings.

Wed, 12/14/2011 - 16:30 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

I'm not interested in trading in and out of anything.  My philosophy is to maintain liquidity until the end-game sets in and then enjoy my years of accumulating physical assets.  I can't be bothered with trying to monetize the market gyrations.  As Taleb says, "it's not the frequency with which you're right, but the aggregate size of your losses that counts."  But good luck to you.

Wed, 12/14/2011 - 14:40 | Link to Comment silverbullion
silverbullion's picture

Exactly! Why should those of us who hold physical gold and silver for the right reasons worry about drops, substantial or not, in paper-manipulated prices? Don't they get it, we don't give a flying Dutchmen about what happens in the fraudulent paper markets. We are most definitely not after fiat or debt-based paper profits. Hell no! Yes, the weak hands might get scared and sell, but at the end of the day it will be their problem, not ours. If you're still stuck in the paper markets, be sure to get out and into physical PMs, especially at these discount prices. Let's turn the table on the bastards. It is just a matter of time before their global fiat Ponzi scheme collapses again.

Wed, 12/14/2011 - 16:24 | Link to Comment Quinvarius
Quinvarius's picture

Frankly, I prefer when the paper market is going up too.  LOL.

Wed, 12/14/2011 - 15:33 | Link to Comment scatterbrains
scatterbrains's picture

Gold bulls should welcome these washout down moves. With each bankster manipulation the float of available physical metal becomes less and less as central bankers, mutual funds, pension funds insurance co., private investors, everybody with any common sense loads the boat.  This will make the move higher even more explosive when the fed finally prints again.

Wed, 12/14/2011 - 12:38 | Link to Comment Mugatu
Mugatu's picture

Gold will fall to $1200, but then you better load up the truck and buy gold then.  Gold is just returning to its former upward trendline which is on a lower slope than the crazy rhino horn slope it has been on.

For right now, just short the general equity market and when we finally break S&P 1000, take all your proceeds and buy gold at $1200.

Wed, 12/14/2011 - 13:04 | Link to Comment EL INDIO
EL INDIO's picture

Gold's fair value is higher than $1600 but we are entering into a temporary deflation period.

No one can tell how low it will go but I wouldn't bet on $1200.

I think $1350-$1450 is where it will stabilise.

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