Gold Stocks Meet Mr. America Stewart Thomson
Jul 25, 2017
- Gold continues to flow from the West to the East at a pretty solid pace.
- To view the latest evidence of this fact, please click here now. The SPDR fund (GLD-NYSE) holdings have oozed down to just 809 tonnes…and done so while the price of gold has strengthened!
- Many Western countries are net exporters of gold in quantities that exceed their total mine production.
- Please click here now. Double-click to enlarge this gold chart.
- Gold’s latest rally began from the July 10 area lows of about $1205. The SPDR fund holdings were about 839 tonnes at that time. Gold’s $50 rally over the past two weeks has occurred while the SPDR fund holdings have fallen noticeably.
- The powerful commercial traders that operate on the COMEX follow the physical market meticulously. The SPDR fund is the Western fear trade’s physical market “crown jewel.” Flows into it influenced the gold price substantially during the 2009 - 2011 time frame. Quantitative easing was the fundamental theme in play.
- The fact that gold can rally now while SPDR fund holdings tumble suggests that Chindian love trade buying is overwhelming Western fear trade selling in the price discovery process.
- From both a fundamental and technical perspective, this rally is now due for a pause. Technically, an inverse H&S bottom pattern appears to be forming. A pause now in the neckline area at about $1260 would allow the right shoulder of this pattern to form.
- Fundamentally, the next Fed meeting is tomorrow and gold tends to trade softly around Fed events. I’ve recommended light profit booking into this rally and I continue to do so.
- Please click here now. Double-click to enlarge this important US dollar versus Japanese yen chart.
- The dollar has fallen against the yen and fallen against gold since July 10. In the short term, a pause for gold and a rally for the dollar seems imminent.
- In the bigger picture, the dollar could begin a “meltdown” phase as gold bursts above the neckline in the $1260 area. A move above $1260 opens the door to a surge towards $1300, which is a bigger profit booking area for gold investors.
- Please click here now. Double-click to enlarge. GDX had a particularly nasty day yesterday. It broke down from a negative wedge pattern on heavy volume.
- To understand what happened, please click here now. Acacia is majority owned by Barrick, and Barrick is a major GDX component stock.
- While Acacia could theoretically recover from this nightmare, it looks hopeless. Even if they do convince the Tanzanian government to reduce the tax bill, that could take years. The sand in Acacia’s hourglass is running out fast.
- Gold stocks are likely to stumble more than gold in the short term because of this Acacia quagmire. There is some very good “big picture” news though.
- To view it, please click here now. I’ve been a little disappointed with the slow pace of the Trump administration in making its campaign promises happen.
- Having said that, Trump’s appointment of Randy Quarles to the Fed may be a much more positive event than most analysts realize. It could be his most important action since taking office.
- That’s because it may represent the beginning of the end for the bank bonus system that has benefitted Wall Street at the expense of Main Street.
- The bottom line is that Dodd-Frank regulation has combined with low interest rates to create a small business loans quagmire. Thousands of small American banks aren’t engaged in trading with other people’s money like the big banks are. They get all the regulatory stick, and none of the trading with other people’s money carrot!
- Quarles could make significant progress in ending this hideous quagmire by reducing regulations. That opens the door to ending the 22 year down cycle in money velocity.
- The arrival of Quarles at the Fed with a deregulatory mandate is not a “free gold stocks parabola now” buy signal, but it is a key step in an important process that can reward patient gold stock investors. It’s very difficult for gold stocks to consistently outperform gold bullion while US money velocity is in a bear cycle.
- I’ve dubbed Randy Quarles “Mr. America”. That’s because he can be the catalyst that ends the bear cycle in bank loans, money velocity, and gold stocks versus gold. A few more rate hikes from Janet combined with real deregulation of the US banking system can produce a powerful bull cycle in bank loans to Main Street.
- It would come at the expense of Wall Street. I’ve predicted that if Quarles is successful, Main Street can grow America’s GDP at a 5% rate, while the US stock market goes into a stagflationary gulag. The entire world gold community should cheer that Quarles makes the US banking system, Main Street, and gold stocks… great!
Jul 25, 2017
email for questions: email@example.com
email to request the free reports: firstname.lastname@example.org
|Tuesday 12th Dec 2017
Special Offer for 321Gold readers: Send an email to email@example.com and I'll send you my free “New Golden Kids On The Block!” report. I highlight key “under the radar” junior gold and silver stocks that seem ready to stage 50% - 100% rallies during Chinese New Year. Potentially large profits can then be booked before they swoon in February. I include key buy and sell action points 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: