Gold Projection Update

First things first: My thoughts on gold are very different from most gold investors. For those thoughts refer to my last post on gold (nearly a year ago) here: Gold. I think the inflationary (and especially 'hyperinflationary') thoughts that most gold investors espouse are mostly if not completely wrong. I think the macroeconomic thoughts that most gold investors espouse (especially regarding government 'debt') are mostly if not completely wrong. For my thoughts on these macroeconomic issues, refer to this list.

But for many reasons as outlined in the first link, I continue to be bullish on gold. In fact, I think the the next rise in gold will likely be due in part to the misconceptions that the majority of investors have about gold and macro. So when QE3 comes (which is a huge monetary non-event, is not inflationary, and actually removes income from the non-government sector) and misperceptions and emotion abounds, it will be fuel for the more legitimate reasons that gold continues to be in a bull market.

With that, here is my updated long term count on gold:

Gold

Here is an update on my long term Gold chart. Again, simply look at a monthly chart and tune out all of the noise. Gold is volatile and the daily ups and downs are going to get worse from here on out. My advice: ignore them.

If you are a short term trader in Gold then I think you are the worst type of masochist. Why would anybody want to sit through the chop, violent ranges and reversals that would accompany Gold on a short term timeframe? There are so many easier ways to make a buck. If you are a Gold 'trader', then don't read my stuff (you probably haven't been anyways).



My fundamental stance on Gold is quite different that most Gold investors (I am sure there are similarities, but there are also more than a few differences). This has been my stance for some time:

"Is Gold a hedge against inflation or deflation?". The problem is in the way the question is phrased, as if it is only a hedge against one or the other. Many people assume that either inflation or deflation affects precious metals, and that's not it at all. The answer when I think about it is: neither.

Consider in the 1980s, we had massive inflation. But Gold had already begun a major decline. Why? Because Volcker's policies had brought stability to the markets. Monetary policy was in a bad place, but he was starting to get things under control again (at least in comparison to the previous 10 years). Gold can fall in inflationary environments. It can also rise in inflationary environments. It can both rise and fall in deflationary environments as well.

I have rejected the 'Gold is an inflation hedge' argument for some time and that is reflected in my writings.

The reason why Gold will continue to do well is because of uncertainty. We see states calling for austerity because they are insolvent, we see Congress calling for austerity under the (incorrect) assumption that the Federal Government is 'insolvent', we see policy makers in Washington clueless with how to deal with the situation, we see that when Washington does take action it is usually to affect Wall Streets best interests (repeal of Glass-Steagall in 1999 being one of the worst offenses), etc.

I have demonstrated that QE is not inflationary. There are many things that people call inflationary that aren't. And many people are also discounting the deflationary tendencies of consumers being in a balance sheet recession. There are a lot of deflationary headwinds. But, QE and other monetary polices of that nature causes instability. Not through 'money expansion', but by changing asset compositions (which creates a psychological backstop based on a misunderstanding of the mechanics): 'the Bernanke Put'. This is causing much more risk taking (look at the re-explosion of margin debt over the last year). This is highly unstable.

And so if Gold is a hedge against anything, it is against instability and against government decisions that are not in the interest of a smoothly functioning marketplace (policies that promote instability), regardless if the overall effect is inflationary or deflationary.

Gold has been monetary asset for thousands of years. This is why if anything is to behave as an anchor against instability, it is Gold. I am unconvinced that things have 'returned to normal', in any sense of the term. So I tend to think Gold will be in a bull market for some time. This doesn't mean the stock market will or has to crash either. I have shown through my long term Gold / SPX correlation charts that although Gold and Equities are mostly negatively correlated, there are significant periods of positive correlation. This is also why looking at Gold ratio charts is so informative.

Gold's new leg of outperformance against Equities?

Looks like it to me:


Now keep in mind this is a ratio chart. If the trend projection plays out, it does not necessarily mean that Gold will go up in price. Nor does it mean that the SPX will go down in price. It just means that Gold will do better than the SPX on a relative basis. This could mean: 1. Gold rises faster than the SPX, 2. Gold goes up while the SPX goes down, 3. Gold goes down but less rapidly than the SPX. All three are viable scenarios if the Gold/SPX ratio is in a rising trend.

Gold

Like I have said many times before, I like talking about Gold when it pulls back, after everybody says that it topped. I don't like talking about it on breakouts.

My last set of charts (see Unloved and Gold) were showing Gold as it was bottoming into support.

The reason I wanted to show it right now is that there is another piece that is pointing to the technical objective of 1550-1600 that I have been showing for the end of this wave, and I wanted to discuss it before Gold officially 'broke out' again. There is the cup and handle that formed in the first half of 2010 which has that as an objective (again, when properly viewed on a log scale chart). And the impulse channel for the final wave also has that as a target.

Another thing to keep in mind is that Gold tends to have very violent and sharp 5th waves. Which is why I never bought the 'triple top' call on Gold as the end of the current Primary degree wave.


Still, this is all just noise in the bigger picture. I think this bull market in Gold is far from done.

Unloved

Like I have said so many times before, I like talking about Gold when it is unloved, not when it is a momentum toy and everyone is talking about it. Like I wrote in my last post: Gold.

But I think the 4th wave is done and momentum is about to swing back to up. Again, I don't really care. The short term moves in Gold are noise to me. I think this bull market in Gold is far from done.

I am just keeping tabs on Gold's bull market. And I think it has much further to go.

Gold

I hate talking about Gold when it is breaking out. When it is frothy and the momentum players are screaming, that is when I ignore the market.

However, when everybody is calling a top, that is when I start to get happy and take notice.

I am a Gold investor. If you want to understand why, read these: http://marketthoughtsandanalysis.blogspot.com/search/label/Gold. And because I am an investor, I have no interest in 'trading' Gold. Gold is volatile, Gold is emotional, Gold will crush the 'avocados' of momentum players.

So when we have nice pullbacks, then I like to update my charts and to make sure everything is still on track.

Here is the chart I look at to tune out all the noise. Gold bull market still intact? You betcha


Here is my EW count if you are interested.

Update on my Gold Count

My last update was on Sept 14 (see Breakout? Not yet). Those of you who have read my blog for awhile know my views and my stance on Gold. That I am far from a Gold pumper, but still believe the Gold bull market has much further to go. This is why I don't put out a Gold count every week or try to micro-manage the waves. We are in a Gold bull market and all of the fundamental drivers that are moving it are still intact. Gold (and Silver and Gold/Silver Miners) are the largest chunk of my portfolio by far. And since I believe the bull market has much further to go, I am sitting back and not worrying about the squiggles.

The comments from my last post are still very relevant.

So even though we got a new all-time intraday and closing high of Gold in US Dollar terms, why don't I call it a breakout? Because it has still not closed above the trendline for the Large Cup and Handle formation that I have been watching. If we get a weekly close above that line, then I think we have an honest breakout.

Also keep in mind, I am a huge Gold bull, and I enthusiastically share my views, but I am certainly no Gold tout.

I have not been screaming about Gold recently through the nice rally we have been having. In fact my last post on gold was when everybody was screaming "Gold has TOPPED!!". (see: My hat is old. My teeth are gold. And now my story is all told.) What I did instead was to show the progress of my bullish prediction on Gold. And what do we have now? A new all time high.

I *hate* buying Gold on breakouts, maybe not quite as much as the people who recommend that you do so. Gold is a momentum player destroyer and will shake you off so fast that you won't know what happened.

I much rather prefer to buy Gold when *everybody* hates it. Like at the beginning of February (A little early in Dec: GLD Chart and then in Apr confirming uptrend: binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market) and the end of July (My hat is old. My teeth are gold. And now my story is all told.).

It makes me feel all warm and fuzzy when everybody is screaming that Gold has topped :) My PM and GSM long positions are by far the largest in my portfolios, much larger than my equity shorts. I am quite content to wait for another large pullback (and yes we will get one) and buy Gold again when everybody, once again, screams "GOLD HAS TOPPED! THE BUBBLE HAS BURST!". I am in no rush and the Gold bull market is far from over IMO.

Gold / Equity Correlation

If you look at a short enough timeframe (maybe a couple of months) you can find negative or positive correlation between *ANY* two assets: Dollar/Oil, Oil/Gold, Salamanders/Twinkies, even Gold/Equities.

The more useful question is what are the long term correlations between two assets. This will let you know if they are moving together in the short term, is it a confirmation (they normally trend together), or is it a *divergence* (they normally trend oppositely)?

Over the long term Gold and Equities are usually *not* positively correlated. I tend to think that this current move of positive correlation is a divergence. Which one is lying? I think we will find out soon:

Breakout? Not yet

What am I talking about? Gold of course.

So even though we got a new all-time intraday and closing high of Gold in US Dollar terms, why don't I call it a breakout? Because it has still not closed above the trendline for the Large Cup and Handle formation that I have been watching. If we get a weekly close above that line, then I think we have an honest breakout.

Also keep in mind, I am a huge Gold bull, and I enthusiastically share my views, but I am certainly no Gold tout.

I have not been screaming about Gold recently through the nice rally we have been having. In fact my last post on gold was when everybody was screaming "Gold has TOPPED!!". (see: My hat is old. My teeth are gold. And now my story is all told.) What I did instead was to show the progress of my bullish prediction on Gold. And what do we have now? A new all time high.

I *hate* buying Gold on breakouts, maybe not quite as much as the people who recommend that you do so. Gold is a momentum player destroyer and will shake you off so fast that you won't know what happened.

I much rather prefer to buy Gold when *everybody* hates it. Like at the beginning of February (A little early in Dec: GLD Chart and then in Apr confirming uptrend: binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market) and the end of July (My hat is old. My teeth are gold. And now my story is all told.).

It makes me feel all warm and fuzzy when everybody is screaming that Gold has topped :) My PM and GSM long positions are by far the largest in my portfolios, much larger than my equity shorts. I am quite content to wait for another large pullback (and yes we will get one) and buy Gold again when everybody, once again, screams "GOLD HAS TOPPED! THE BUBBLE HAS BURST!". I am in no rush and the Gold bull market is far from over IMO.

Thirsty?

I think BVN's Weekly chart is very bullish. This series of patterns (a cup and handle forming the handle of a much larger cup and handle) is suggesting a large move up. BVN is a major gold and silver producer. And I (of course) am very bullish on gold and silver.

This would also tie into gold's very positive seasonality which I talked about a few weeks ago here: My hat is old. My teeth are gold. And now my story is all told.


Disclosure: I have a long position in BVN

Aurizon: real deal?

Looks like Aurizon Mines (AZK) might be on the verge of a real breakout. This is a gold miner that I like and have followed for awhile.


Disclosure: I have a long position in AZK

Doctor, It hurts when I do this

Doctor: Well then don't do that .... (yuk, yuk)

So the question is, what is "Doctor Copper"'s diagnosis for the economy? I would say pretty crappy.

"binv you are just a stupid permabear! Copper has obviously been rallying so you are obviously wrong!!"

Maybe. But the rallies recently look a lot more like a reaction than the start of a sustainable bull move. I think we have a bit more upside in copper (few more days / weeks), but then I think it will start correcting again. I think the large corrective structure since the beginning of 2010 is not done yet.

Also, as I have stated many times, here is my observation that both equities as a general asset class and the Dollar can fall together: US Dollar Count Updates, and why I think real assets will certainly outperform purely economically correlated assets and have nominal gains as well: Long Term View. I am also one of those whackos that think Gold is money and not a commodity and am bullish on Gold first and foremost quite independent of the inflation / deflation debate: binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market

My point in stating all this is that while I am bearish on Copper for the intermediate term (next several months), I am quite bullish on Copper for the long term (next several years). This is NOT because of an "economic recovery", but because Copper is a real asset and I expect most real assets to perform well. I view the next several months as a potentially very good long term entry point, much like December of 2008 was (and yes I did buy a couple of Copper Miners there, but mostly Gold and Silver Miners).

Just a few thoughts at any rate.

My hat is old. My teeth are gold. And now my story is all told.

Update on my Gold count. See this post for my last major update: binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market.

I think the old cup and handle was a fakeout, but is in fact making room for a larger cup and handle. Also this count fits in quite well with Gold's seasonality during a presidential midterm: http://jessescrossroadscafe.blogspot.com/2010/08/gold-seasonality-in-presidential.html

Update on Short Term Gold Count

Here is my short term Gold count (using GLD as an intraday proxy for Gold). To understand where this count comes from and all of my longer term charts and counts for Gold, see this post: binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market

My target for the next major wave is ~1400 based on the current cup and handle formation. This also fits with the price touching the upper channel line.

Sprott / John Embry: 17 Reasons to Own Gold

Here is another good article (pretty quick read) of why gold is a good investment, if not the premier investment, for the current macro environment. Most of these I agree with, and some of them I don't. But it is a good article that I encourage you to read.

Here is the article: http://www.sprott.com/docs/Reports/reasons_to_own_gold.pdf

I am going to comment on my views of the points below for anybody who is interested:

1. GOLD IS RETURNING TO ITS TRUE HISTORIC ROLE AS MONEY

Completely agreed - The Gold Blog. Gold/Silver/GSMs (and a little Oil for good measure) - LINK and Why I hold Gold: Why I am a Long Term Optimist and consider holding gold and Optimistic Endeavor, and Why I think the Stagflationary Scenario is more likely Macroeconomically in the Intermediate term (next several years) - http://caps.fool.com/Blogs/why-i-hold-gold-why-i-am-a/402614

2. THE INEVITABILITY OF A COLLAPSE IN THE U.S. DOLLAR

This is a lot too strident / overreaching for my taste. I think a currency crisis is quite likely in the US Dollar, but not a collapse. I suppose it is only a difference in degree, but I don't expect the Dollar to become "worthless" in most of our lifetimes. But, could the Dollar be replaced as the reserve currency within our lifetimes? That is the far more interesting question and I think the odds on this outcome are not at all trivial

3. OTHER SIGNIFICANT WORLD CURRENCIES OFFER NO REFUGE

Completely agree. Some fiat currencies will do better than others (most will fare better than the Dollar) but all will pale in comparison to gold in terms of retaining value and purchasing power.

4. THE DESTRUCTION OF GOVERNMENT BALANCE SHEETS AND THE WIDESPREAD IMPLEMENTATION OF ZERO INTEREST RATE POLICIES MAY ULTIMATELY RESULT IN HYPERINFLATION

I agree with this up until the last word. ZIRP is a plague. The government thinks of all of us as consumers, not citizens, certainly in its policies and rhetoric. "We need to borrow and spend our way out of this recession!". This is why real interest rates are negative. Every policy by the Treasury and Fed are designed to get us to spend and not to save. That said, I do not think ZIRP and borrowing leads to hyperinflation. The problem is debt, and it is collapsing, in the presence of extreme monetary inflation. The problem I think we are far more likely to be facing is stagflation: More on Debt Saturation Equals Diminishing Growth, Employment, and Capacity Utilization… - http://caps.fool.com/Blogs/more-on-debt-saturation-equals/394221

5. THE TRUE IMPACT OF THE MALIGN SIDE OF DERIVATIVES HAS YET TO EXPRESS ITSELF

Completely agreed.

6. INVESTMENT DEMAND FOR GOLD IS RAPIDLY ACCELERATING BUT WE’RE ONLY IN THE EARLY STAGES OF THIS PHENOMENON

Completely agreed. Everybody is calling the top of the bubble, but only a fraction of investors actually hold gold. Homeownership as a percentage of the population was very small before the housing bubble, then with easy monetary policy and easy lending, a huge percentage of the population became homeowners (with homes they couldn't possibly afford for the long term) and nobody thought anything of it, save for a few people calling it a bubble. My point being is that people are very quick to call this a Gold Bubble that is about to burst even though there is very little widespread participation. When >50% of the public holds gold, then there might be a case. Until then, I am very happy to hold gold in the very early stages of this 'bubble'.

7. GROWING RECOGNITION THAT MANY PAPER GOLD PRODUCTS DO NOT HAVE THE GOLD BACKING THAT THEY PURPORT TO HAVE

Exactly. This is why I will never invest in GLD, and why my biggest holdings are CEF and PHYS.

8. MINE SUPPLY IS NOT ANTICIPATED TO RISE FOR SEVERAL YEARS, IF AT ALL

Agreed 100%.

9. CENTRAL BANKS ARE NEARING AN INFLECTION POINT WHERE THEY WILL NO LONGER BE IN A POSITION TO SUPPLY THE GOLD NECESSARY TO KEEP THE MARKET IN EQUILIBRIUM

Again, a perfect comment. Western central banks have been net sellers for the last 10 years. This has kept the price of hold from rising as fast as it otherwise would. But consider the fact that gold has increased 500% during the last decade *despite* net selling (more supply coming on to the market) from the worlds largest gold holders. Both the Canandian and English Central Banks are out of gold ammunition, and the Federal Reserve and Treasury are in a similar position. .... and demand continues to increase.

The makes the IMF Gold Sale issue that much more important: Five Questions About Gold The IMF Refuses To Answer - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=384031

10. INCREASING LIKELIHOOD OF ACCELERATING PURCHASES OF GOLD BY EASTERN CENTRAL BANKS

I have talked about a possible avenue here: Gold - China's End Game? - http://caps.fool.com/Blogs/gold-chinas-end-game/338913

11. INCREASING SKEPTICISM ABOUT U.S. GOLD RESERVES

Agreed. See point #9 above.

12. LARGE SHORT POSITIONS

Completely agree. See Silver, Short Positions, and Potential Squeezes - http://caps.fool.com/Blogs/silver-short-positions-and/366926. Same thing applies to gold.

13. INCREASING RECOGNITION OF THE FACT THAT THE GOLD PRICE HAS BEEN SERIOUSLY SUPPRESSED

Agreed. I am sure gold bears label this statement as gold bug wing nut conspiracy theory talk. But GATA has amassed much evidence to support this claim.

14. THE SUPPRESSION IS EVIDENT IN THE CONTINUING EXTREME UNDERVALUATION OF GOLD

I agree. Altough as Bill Fleckenstein points out, gold is very difficult to value to begin with: Bill Fleckenstein Interview - http://caps.fool.com/Blogs/bill-fleckenstein-interview/401191. But I lay out a few ways in which gold can be (IMO) reasonably valued: Update on the Dow/Gold Ratio and a few more Gold Ratios and ContraryInvestor: The Many Faces Of Gold - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=400090

15. THE RELATIVELY SMALL SIZE OF THE GOLD MARKET

Agreed.

16. GOLD IS IN AN ESTABLISHED POWERFUL BULL MARKET

Completely agreed: binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market - http://caps.fool.com/Blogs/binves-gold-foil-hat-zone/403421

17. GOLD HAS ENDURED

Completely agree - The Gold Blog. Gold/Silver/GSMs (and a little Oil for good measure) - LINK

binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market

WARNING!! binv's Tin Gold Foil Hat Zone !!


.... Just call me a Gold Bug. (In case you didn't notice, I am being sarcastic. Because anybody who is bearish on gold labels anybody who is bullish on gold a Gold Bug. But that's fine, I will take it).

I am very bullish on gold. This is no surprise. I have written on the subject of gold many times.

The main reason why I am bullish on gold is that it is in a massive bull market in comparison to fiat money. Gold is a currency. Like any currency, you don't own it because it has intrinsic value, you hold it because it is a store of wealth. So when I say gold is in a massive bull market in comparison to fiat money, I mean exactly that. Gold will hold its value while fiat money is devalued in comparison.

As Gary says: Gold is not about price, gold is about value

We have one of the final possible bubbles at it's apex: A Sovereign Debt Bubble. Economies all over the world are suffering and are trying to solve a debt related crisis with more debt. It was *never* going to work and will end badly.

So when ranking currencies relative to each other, and all the major currencies are engaging in some form of Devaluation / Quantitative Easing, they are all fighting debt with more debt.

The problem is debt.

And the Fed has made it very clear that monetizing as much debt as is necessary to keep the system going, at the direct expense to the Dollar, is not only a course of action that is open to them, but THE course of action that they are taking and will take. This plan will continue until there is no longer a Federal Reserve.

Yet the market is trying to purge excesses, and the Fed and the Treasury is not allowing it to happen.

This makes the outcome both simultaneously deflationary and inflationary. The market wants to, and desperately desires to save, but the Fed is directly hurting savers behind the backdrop of *extreme* monetary inflation.

I have been hammering on the topic because it is the critical issue to understand how all of the advanced economies government's action will not only fail to produce the desired effects, but will more importantly make matters worse. The main issue is  Debt Saturation - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=357428. It is critical to understand that an increasing debt load has decreasing marginal utility and there comes a point due to servicing requirements that all new debt has a negative economic impact. This is why we were NEVER going to be able to borrow and spend our way out of a crisis that was caused by too much debt to begin with.

This sets up an extreme deflationary environment (this debt load is unsustainable) within which the Federal Reserve will monetize unprecedented amounts of debt at unprecedented rates. Which will result in a simultaneous deflationary and inflationary outcome: stagflation. There is NEVER anything in economics and especially macroeconomics that has only one cause and one effect. There are always multiple effects with varying degrees of influence (both in absolute value and transience). There will be deflationary impulses and there will be extreme monetary inflation, the Fed will see to that. Which means that I think the most likely outcome will be a combination of the two: stagflation. Economically correlated assets go down in value (like your home and equities as a general asset class) and things you need to buy/consume (such as real assets / commodities) cost more. Really the worst of all possible outcomes.

I do think that most inflationists discount the amount of debt that is collapsing (even though most deflationists use measures like M2 and M3, which have a lot of non-monetary components to prove their point) while at the same time most deflationists discount the amount of monetary inflation the Fed can generate (they argue that the Fed creating base money is like pushing on a string because the banks don't have to lend, even though I am many others have pointed out that the Fed has gone around the banking system and has started monetizing private sector debt directly, which is a trend that is likely to increase not decrease). Most people on either side of the debate is not considering strong evidence that both forces are significant.

The result is and will be stagflation. It is really the worst of all possible outcomes. The economy needs savers and the Fed will not allow savers to be compensated for their risks. This will ultimately result in the collapse of the bond bubble as there is no longer any faith in Sovereign Debt. And the world will turn to real assets as a store of value.

And this sets up the final bubble ... the Gold Bubble.

Now I don't mean this pejoratively. And I am not casting a negative connotation on it. Bubbles are what they are. When Central Bank monetary policy forces all of us to become speculators by not rewarding savers, then bubbles are formed.

Gold doesn't care that it is in a bubble. It is quietly and quiescently preserving wealth. Again Gold is NOT about price, gold is about value.

I don't hold gold because I like shiny objects. I don't hold it because it makes the world go round. I hold it because it will be the last currency standing that preserves wealth as the world's economy goes through this painful deleveraging process.

No fiat currency will preserve wealth. Certainly not when this crisis has run its course. Some will fare better than others (many will fare much better than the US Dollar), but all will pale in comparison to gold.

The current trend of piling debt on top of debt is unsustainable: Debt Saturation - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=357428. And neo-economists and politicians have to get their collective heads out of their collective asses and not allow a vampire industry (financials) hijack the real economy. But since that won't happen willingly, then the market will force a crisis that will fundamentally change how we view politics and the economy. Crony capitalism will go away. Good laws like Glass-Steagall will become reinstated. Too big to fail will be abolished. Grass roots companies will grow like a new forest. The Mittelstand companies of Germany (small/medium firms, mostly family owned) is exactly the economic model that most of the western world should be following, and I believe will in the future.

And when the crisis nears a real bottom, I will be the first person to dump my gold and invest in the new world economy. One that produces goods, and solves problems, and increases the quality of life for humanity.

Gold is not an end in and of itself. It is a means to an end, a way to preserve value as the economy purges excesses so that the new economy can be invested in.

It is a way to save. And since the Fed is not allowing us to save in the Dollar or Treasury debt, people will turn to saving in real money.

I don't care if you don't agree with me. I don't care if you think gold is a useless shiny rock (it is, just like the Dollar is a useless piece of green paper). I am not here to convince anybody of anything. I am just stating my opinions and why I have them.

I have complied a long list of posts that I have written discussing my macroeconomic views on the Dollar, Inflation/Deflation/Stagflation, and Gold. These might be useful in understanding why I have come to these opinions:

--- Debt Saturation - LINK
--- Moving Some Macroeconomic Deck Chairs: The Dollar, Dollar Swaps, Bonds and LIBOR - LINK
--- What the Bond Market is Trying to Tell the Stock Market: A Look at the Yield Curve and Expectations - LINK
--- Thoughts on the Euro, the Dollar, and a Long Term EUR/USD Count - LINK
--- Something Very Strange Is Happening With Treasuries - LINK
--- The Long View - LINK
--- The Gold Blog. Gold/Silver/GSMs (and a little Oil for good measure) - LINK
--- Thoughts on the US Dollar, Analysis of the USDX Long Term, Follow up on the Gold Blog - LINK
--- The Dow / Gold Ratio - LINK
--- The Gold / Silver Ratio - LINK
--- Gold Miner Performance Relative to Gold - LINK
--- Gold Miner Performance: A Look At Miner Cost Inputs vs. Gold Price - LINK

US Dollar






Bonds



Gold

Monthly Chart - tune out the noise



Elliott Wave Counts










.... at least that all makes sense if you are crazy like me :)

Thank You for visiting binv's Tin (and Gold) Foil Hat Zone

Update on Short Term Gold Count

Refer to my last large update on Gold here: binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market, and in particular, here is my update to this chart.

From my last chart I was targeting 1230 as an inverse H&S target which we basically reached and then moving up to ~1300-1350 to the upper channel line before putting in another correction.

How much will gold correct? Again, I think quite honestly gold is in a massive bull market. This war is about the confidence in sovereign debt and the integrity of fiat currencies. It is about real money vs. fiat money. Nothing in this crisis has made the Dollar any stronger fundamentally. So the Euro vs. the Dollar, while interesting, is a sideshow. Gold is at or near all time highs in nearly every major fiat currency. So the correction may not be that dramatic. Wave 2 pullbacks within extensions (and my position is that gold is in a massive Wave 3 extension right now that started since 2000) are usually only 38%. Not advice. But I also bought gold at much cheaper prices so I can afford to be patient and pick up oversold entries whenever they occur.



May 14, adding Gold/Equity Correlation chart

Update on the Dow/Gold Ratio and a few more Gold Ratios

Here is an update on my Dow/Gold Ratio chart. The original post, with a *very* detailed explanation of what the DGR means, and what my projections are for both Gold and the Dow can be found here: The Dow / Gold Ratio





Here are some other key Gold Ratios and the historical and relative performance. I had said that I would write a dedicated post about these someday, but I didn't. The chart is pretty self-explanatory though.

Some more Gold Miner charts that I like

Continuing along with the theme from my last post (A look at a miner that I continue to remain very bullish on - AEM) here are some more gold miner charts that I like:

A look at a miner that I continue to remain very bullish on - AEM

No need to lay out the fundamentals for Agnico-Eagle Mines (AEM). They were intact years ago when I first valued them and the case for their continued favorable valuation still remains high. Instead, let me point you to a few articles from the man who really knows his Gold and GSMs, Christopher Barker (TMFSinchiruna)

-- Enjoy the View From Gold Mountain
-- Agnico Braves the Cold for Gold
-- Our Little Eaglet Is All Grown Up
-- Agnico-Eagle Will Shine in '09

But what I am more interested in focusing on here are the technicals. And I think they are still *very* favorable for AEM. Of course, this presupposes you are bullish on gold as well (and I obviously am).

I think we have a large bullish ascending triangle in the making and getting close to completion (both a sym-tri and an ascending-tri are continuation patterns, but the ascending tri is marked by a top line that is down-sloping/nearly horizontal with a bottom support line that is clearly uptrending). And as the notes on the charts suggest, there is still a lot of upside potential.



(Disclosure: I am long AEM)