The Summer Doldrums for PM stocks is ending soon. Give your best guess which week you think PM stocks will bottom using HUI as an indicator. Reasons or insights on your choice will be most appreciated.
The price of gold has been virtually unchanged for three days straight, but the HUI has broken out...How can one call a bottom on the HUI after the HUI has broken out. Is the HUI not a forward indicator ot gold/pm prices?
Based on the price of gold being bullish right now, it will have to slow down, all just a matter of time. Gold always pulls back at some point. Only to rise to higher highs of course. I don't know which week, so I will guess the middle of next week, and after a new high. Things are much different today. Perhaps we compare us to what happened in Japan with "the lost decade". This may be hopeful, but...
Not big on waves, but here is a chartist of sorts calling for a pullback:
At this time, Gold is quite overbought and due for a small corrective pattern. It would seem logical that after a rally from $1155 to $1243 roughly, that we would pull back 38-50% of that move, so I'm looking for a pullback to around $1200 plus , and then a rally. We could see new highs in Gold in the next few months, and $1300 is on the radar now.
My guess is the middle of B) because there isn't any quantitative easing left. There may be another round of housing stimulus, but nobody figured out, why is that idiotic measure helpful, if everyone raises the price of their home $8500 and you wind up with the same price anyway?
It's because housing is still falling, and sellers can't raise those prices. So stimulus is effective because it moves homes at foreclosure values, and you really do get the $8K in your pocket in most of the country. Where it does move market prices, the buyer breaks even, and the seller gets the $8K because he cranks up the price.
It's all Monopoly money, and the Fed gets to short the brains out of specie, real money, this week on silver futures option expiry 26 August.
"...because there isn't any quantitative easing left."
They'll move slowly until the election passes, and the 2 new members to the Board are approved by the Senate, and Janet Yellen is approved as Vice Chair. Eventually they will move, however. They will have no choice. They are in a box of their own making. Monetary policy as measured by M3 is tighter than it's been since the Depression. They will move and gold will take off like a scalded chimp if it hasn't already made the move in anticipation of Ben doing what comes naturally.