Gold's Lead Indicators: PBOC & Barrick
Apr 28, 2015
- While the benchmark GDX and GDXJ ETFs are struggling to stage clean upside breakouts, many individual gold stocks are staging dramatic rallies.
- On that note, please click here now. That’s the daily chart for one of the world’s top ten gold producers, Newcrest.
- The stock has been rallying aggressively. A breakout from a bullish inverse head & shoulders continuation pattern appears to be in play. Newcrest may be about to begin another major rally!
- Please click here now. That’s the daily chart for Newmont, another top gold producer.
- While gold stock enthusiasts may want to see Newmont blast to new highs immediately, I think it’s more likely to form a bullish consolidation pattern, much like Newcrest did, before taking out the highs in the $26.67 area.
- Please click here now. That’s the GDX daily chart. Note the black downtrend line in play. As more individual stocks begin to act like Newmont and Newcrest, I expect GDX to rally above that key trend line, and attract some nice hedge fund buying.
- GDXJ has already broken above its downtrend line, but the most likely scenario is for a slow but steady upside grind. Please click here now. That’s the GDXJ daily chart. With the emergence of the love trade (gold jewellery) as the dominant gold price driver, gold is gaining more respect as an asset, and it is trading with much less volatility.
- That’s the good news. The bad news is that gains will be muted, until Chinese and Indian demand is universally recognized as substantially exceeding mine and scrap supply.
- Still, fear trade enthusiasts should keep a close eye on the actions of the PBOC (China’s central bank). Most major actions of the PBOC are not related to the love trade. They’re related to the fear trade.
- A growing Chinese QE program, a possible announcement of higher official gold reserves, and/or a public endorsement of gold by the PBOC could create a very powerful rally in gold, and an even bigger one in gold stocks!
- Please click here now. That’s the GDX one minute bars chart. Without the “juice” of a PBOC or other fear trade announcement, gold stocks will continue to grind their way higher, but probably in a manner that provides little emotional satisfaction each day.
- For the average investor, it was a bitter-sweet day yesterday, because a lot of the day’s gains disappeared in the last hour of trading, but GDX was still up about two percent on the day!
- Please click here now. That’s probably the world’s most important gold stock chart right now. It’s the daily chart for Barrick.
- Barrick is a key GDX component stock, and it’s flirting with the neckline zone of a massive inverse head and shoulders bottom. The pattern has two heads, and the right shoulder appears to be about to form.
- Barrick’s chairman John Thornton apparently bought more than 350,000 shares in the open market in March. That’s a serious commitment to the company, and to higher stock prices!
- The next Fed meeting begins today. I don’t expect anything dramatic from Janet herself, but Fed governors and presidents like to voice their opinions in the mainstream media as the meeting takes place.
- That can rattle the gold market a bit, and it may be one of those statements that creates the right shoulder on the Barrick chart. Aggressive investors may wish to consider purchasing Barrick call options on any price weakness that occurs this week.
- Any major fear trade event can theoretically drive gold hundreds, or even thousands of dollars higher. Having said that, without the existence of the love trade, gold would have collapsed in 2013 much like it did in 1980.
- It would probably be languishing in the $300 - $800 range now, and would stay there until the next financial crisis triggered central banks to either flood the system with liquidity, or revalue gold itself.
- Please click here now. Apple plans to double the number of its stores in Greater China (China, Hong Kong, Taiwan) by mid-2016, and I think sales there will easily surpass sales in America by early 2017.
- The point I’m making is not about Apple. It’s about the growth of the love trade for gold. If China engages in a major QE program, its stock market could soar higher for years, and citizens would celebrate by buying vastly more gold jewellery.
- Nothing the Fed does in its meeting this week will change Apple’s plans for massive sales growth in China, and nor will it change the insatiable and exponentially growing appetite of Chinese citizens to own a lot more gold.
- Attention silver enthusiasts: Please click here now. Silver staged a beautiful upside breakout yesterday from a bull wedge pattern, and its holding the gains nicely! Note the fabulous set-up on the 14,7,7 Stochastics oscillator at the bottom of the chart. I affectionately refer to it as “Tony the Tiger”, and Tony is definitely roaring “Buy”!
- Please click here now. That’s the daily chart of the silver stocks ETF, SIL-NYSE. Note the RSI oscillator at the top of the chart, and the nice symmetrical triangle breakout occurring. Silver is my second largest holding, and silver stocks are my main focus at the current time, to play the next move higher in the precious metals market!
Apr 28, 2015
email for questions: firstname.lastname@example.org
email to request the free reports: email@example.com
|Tuesday 19th May 2020
Special Offer for 321Gold readers: Send an email to firstname.lastname@example.org and I'll send you my free “Gold & Silver Junior Shotguns!” report. I highlight key junior miners set for magnificent upside action as gold bullion blasts above $1800. I include key tactics for each stock.
Updates Subscription Service: Note we are privacy oriented. We accept cheques.
And credit cards thru PayPal only on our website. For your protection
we don't see your credit card information. Only PayPal
|Subscribe via major credit cards
- or make checks payable to: "Stewart Thomson" Mail
to: Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario
L6H 2M8 / Canada
is a retired Merrill Lynch broker. Stewart writes the Graceland
Updates daily between 4am-7am. They are sent out around 8am. The
newsletter is attractively priced and the format is a unique numbered
point form; giving clarity to each point and saving valuable
Thomson is no longer an investment advisor. The information provided
by Stewart and Graceland Updates is for general information purposes
only. Before taking any action on any investment, it is imperative
that you consult with multiple properly licensed, experienced
and qualifed investment advisors and get numerous opinions before
taking any action. Your minimum risk on any investment in the
world is 100% loss of all your money. You may be taking
or preparing to take leveraged positions in investments and not
know it, exposing yourself to unlimited risks. This is highly
concerning if you are an investor in any derivatives products.
There is an approx $700 trillion OTC Derivatives Iceberg with
a tiny portion written off officially. The bottom line: