Library
April 02, 2020
When people are worried about the future they turn to gold to protect their savings. That’s rarely been more true than today.
Surging demand and disruptions from the coronavirus pandemic have created a shortage of the small gold bars most popular with consumers. Those who do manage to get their hands on metal have to pay up –- well above the per-ounce prices being quoted on financial markets in London and New York.
Some dealers are desperately contacting clients to see if anyone is willing to sell their gold bars and coins, and offering a rare premium over spot prices. Others have given up trying to trade altogether.
“People want to buy, not to sell gold,” said Mark O’Byrne, the founder of GoldCore, a dealer based in Dublin. “We have a buyers’ waiting list and we emailed our clients seeing who wished to sell their gold. At this time there is roughly only one or two sellers for every 99 buyers.”
Size is a key reason for the crunch. While there’s plenty of gold in a big trading hub like London, banks and other institutional investors there typically use large bars of 400 ounces. That’s not practical for a regular person who may not want to cough up more than $600,000 for a single bar. Instead, retail investors prefer kilobars (about 32 ounces), 1-ounce bars and coins, or something even smaller.
February 13, 2020
TREND REMAINS STRONG AND INTACT
Price action in gold has traded in a narrow window over the past few weeks, winding into a tight coil as it begins to consolidate for another leg higher. The wave counts suggests that gold is in the early stages of a Wave 5. In the chart above, the key near term level to watch to the downside is $1540. This level served as resistance in September 2019, and has been support for the last month. This level also roughly coincides with rising support from the uptrend channel that commenced in August 2018.
A break of $1590 to the upside would represent a breakout of the symmetrical triangle gold has been forming since December 2019. The measured moved would imply a run to the top end of the channel around the $1750 level.
If gold breaks the $1530-40 level to the downside, it would likely fall swiftly back to support at $1450, at which point a full backtest of the six-year breakout at $1380 would remain in play. By all indications, this seems like the least likely scenario. Probabilistically, I think gold is more likely to break up from this coil, or at worst, retest $1540 before making a thrust higher.
As always, I hope this is helpful, and I welcome any feedback or questions.
January 30, 2020
BULLISH TAILWINDS IN US HOUSING
In this video, I review key technicals in the US housing market, specifically the real estate ETF REZ, home construction ETF ITB, mortgage rates and lumber. I also explore some key demographic trends that could help fuel the rise in the US housing market.
https://www.youtube.com/watch?v=wd28lpDwSAE
January 29, 2020
SILVER TESTING KEY LEVEL
In this video I take a look at the prevailing long and short term trends in the price of silver. While the decade-long trend remains down, the one year trend remains up. Yesterday’s .60 drop in price now has silver testing rising channel support from the bottom in May 2019. Bulls will want to see this price hold for another leg higher. If price breaks down from this rising support, the key levels are 16.90 and 16.20. Bulls especially need silver to remain above 16.20 for the longer term bullish picture to remain in play.
https://youtu.be/3cK9R2jYJBY
January 27, 2020
FAILED BREAKOUT DISCONCERTING FOR COMMODITY BULLS
In early January I got very bullish copper as price was breaking out of a multi-year symmetrical triangle. The trade worked well initially, but price subsequently reversed and fell precipitously. In this video, I take a look at this price action, explain how I build a chart, and what the copper price means for the commodities sector.
https://youtu.be/cHk3jkwP2Ig
