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Graceland Updates
1."Gold prices
are likely to moderate to 1,300/oz by the end of
2013 and then gradually decline to 1,100/oz by the
end of 2014 as economic growth in major economies regain momentum as
investors increase their demand for riskier assets, National Australia Bank
says in a report." - Dow Jones Commodity News, September 3, 2013.
2.I realize that most investors in
the gold community probably believe that the June lows near $1180 are a
"final" bottom.I think it's a bit
early to make such bold statements, and obviously the central bank of
Australia feels the same way I do.
3.Regardless, there's no question that the
$1180 area is at or below the cost of production, for many mining companies.Value-oriented investors know that when gold
trades in the "COP" (cost of production) zone, both gold and
mining stocks should be accumulated, and held with very strong hands.
4.I issued a modest
profit booking call in the $1411 - $1425 area last week, and took about 5% of
my overall position off the table.Gold prices have
softened since then.$1384 is a minor HSR (horizontal support &
resistance) zone, and it could be bought by investors who feel they are
missing out on the rally. Personally, I prefer the $1340 - $1350 area for
short covering and new buying.
5.Please click
here now.That's the
daily gold chart.There's a beautiful uptrend
channel in play.While my stokeillator
is on a sell signal, that doesn't mean the gold price has to fall.
6.Gold could just trade sideways within
the channel for a few weeks, and work off the overbought condition of the stokeillator.
7.While light profits should be booked in
the $1410 - $1425 price area, that's not a "top call".Gold, silver, platinum, and
palladium can all move higher, before there's a larger correction, or a move
to new lows.
8.Please click
here now.You are
looking at the daily silver chart, and I'd like you to note the green flag-like
pattern that has appeared.
9.There is substantial sell-side HSR in
the $26 area, but a lot of bank economists believe silver is set to
outperform gold over the next year or so.That could
attract quite a bit of buying interest from their clients.
10.The
flag-like pattern suggests that silver could stun the current top callers,
and rise to the $30 area.
11.Let's take a closer
look at that flag-like entity.Please click
here now.That's the
hourly bars chart for silver.Note the potential
breakout from the pattern, to the upside.
12.Oscillators
like my stokeillator (14,7,7 Stochastics
series) can stay overbought during momentum-based moves, rather than declining.Breakouts from flag patterns can be followed by
that surging price and "flat lining" oscillator action.
13.Regardless,
technical breakouts should only be bought by gamblers, using very limited
risk capital.Long term investors should focus their
buying on the COP (cost of production) zone.
14.An
argument can be made that the end of QE could actually be bullish for gold.As QE is
tapered, the US government may find that it has to pay higher interest rates
on its bonds, to attract buyers.With the Fed fading
from the demand side of the picture, only a huge stock market tumble would
attract substantial T-bond buying from institutional investors.
15.Rising interest rates
mean higher borrowing costs for corporations, and these costs tend to be
passed on to consumers in the form of higher prices.
16.Institutional
investors could become concerned about the financial situation of the US
government, because higher borrowing costs would mean the government would
have to borrow even more money.Rating agencies
could begin to downgrade US bonds in that situation.
17.Against
a backdrop of the ongoing industrialization of India, growing demand from
China, and a price of gold that is near the cost of production, the gold
community may find that institutional money managers become very interested
in owning. a lot more gold than they hold
now.
18.There are two key
fundamental events this week.First, there is the
G20 meeting in Russia.Second, the jobs report will
be released on Friday.Gold often sells off going
into the jobs report, and then surges higher after it is released.
19.Leveraged
traders should go to the sidelines fairly quickly, rather than trying to
predict the outcome of these key events.
20.Longer
term investors should not be concerned. Focus on buying gold, silver, and
metal stocks, if gold goes to $1350.If these two reports turn out to be
bullish, book more light profits in the $1470 area.
21.Much
ado about nothing? A lot of analysts seem to be working hard to call a bottom
for gold stocks here, and are predicting an upside parabolic event.Others believe another giant decline is coming.
22.Does
it really matter if gold has bottomed?Focus on
value that is offered in the cost of production (COP) zone, and the ultimate
bottom will look after itself.Gold stocks are
likely in a range, defined by the GDX $22 - $32 price area.Until
GDX trades well above $32, or well below $22, I don't think anyone can answer
the question of what's next for gold stocks.
23.Please click
here now.You are
looking at the daily GDX chart.Bullish technicians
see a head & shoulders bottom formation in play on many gold stock
charts.
24.If GDX does falter
here, I think it's important to buy the $22 area, and vastly more important
to be a buyer below there, as uncomfortable as that might be.Cheer for
GDX to blast above $32, but be ready to buy under $22, if it happens!
Special Offer For
Website Readers:Send me an Email to freereports4@gracelandupdates.com
and I'll send you my free "Hot Shots" report.The
T-bond market is arguably the most liquid in the world, which makes it ideal
for day traders.I'll show you my key buy and sell
trigger points!
Thanks!
Cheers
St
Graceland
Updates
Written between 4am-7am. 5-6 issues per
week. Emailed at aprox 9am
daily.
www.gracelandupdates.com
www.gracelandjuniors.com
www.gutrader.com
Email: stewart@gracelandupdates.com
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