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Monthly Digger - August 2008


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I am still trying to gauge the epic breakdowns in GG and AEM specifically as these two stocks were leaders in general throughout the entire bull market. Now that we have confirmation of major institutional dumping of these two issues along with massive trendline breakdowns, I am having serious thoughts about the future of gold. I hope you guys can count on me to act as some huge contrary indicator here, but in my many years of metals analysis, I have never witnessed such as bearish week of trade as this past week. I am expecting a full blown calamity in gold over the course of the next 10 days.

 

I have DEFINITELY set the record straight..  B)

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One man's calamity is another man's golden opportunity. Bring it on.

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PnF is a guide if done correctly.  The bar chart takes presidence.  If I looked at that one from stockcharts I might assume it is correct.

 

I've done a few PnF charts on my own, but I avoid getting all worked up by their 3x1 charts.

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Will you buy me lunch if the XAU crashes down to 120 before September? :D

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Kaotic, actually I may not be able to buy you lunch since there's no guarantee I'll be able to access my credit at the bank since they may fail by then.?

 

The banking system is very sound with a long reputation to meet all speculators needs.?  :lol:

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i've been hearing real stories about the collapse of available consumer credit. This worries me greatly and I hope ALL of the 'Golden Stoolies' have prepared accordingly. I also beleive that this event may not necessarily be positive for gold though as demand for cash and paper dollars/pounds/euros becomes in much higher demand over bullion.

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K your in the wrong sector then. If what you portend is true you should be in some kind of government treasuries foreign or domestic. And a week or two of panic doesn't matter in the long run. I think the long holders here are parking their money in gold and miners to protect against any panics. While cash maybe king, it won't generate any income. Besides, US citizens are not the only buyers of precious metals.

 

Like I said before, a worldwide slowdown in production will affect the industrial metals. Without knowing what the finite banking losses are or will be a conservative approach to investing will pervade except in gold and silver and wherever it comes from (mines).

 

I'm waiting to add in a couple more weeks of course I'll add to PMPIX unless it gets into the 30s then I'll probably jump the gun but low enough for me.

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Starting August within a hair of last lowest close back on April 29 for HUI. Can you hear the pin drop?

 

http://www.StockSharePublishing.com/ChartL..._1217629484.png

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Well, investment demand remains strong. GLD added a tonne and now up to 674 tonnes.

 

IMO, today?s thrashing of the gold stocks had a lot to do with GFI?s pre-market guidance announcing the lowering of its production for the second half of the calendar year. If read carefully, I found the guidance was somewhat constructive and the over reaction to the downside unwarranted. But I didn't buy any, given the Rand's recent strength.

 

The chart I'm posting shows how GFI gapped down 10% at the open. Although only around a 15%? weighting or so of the HUI Index, many investment funds own GFI. A typical PM investment fund will have Gold Fields along with a larger weighting of stocks such as Barrick, Newmont, Goldcorp, AngloGold, Harmony, Agnico-Eagle, etc. If you look at the chart I posted, these are the stocks that tanked (couldn't put them all on the chart). It appears to me to be forced liquidation and deleveraging by these funds using their more liquid stock holdings, the large cap gold stocks just mentioned. I had a number of stocks (not held on a large percentage basis in the investment fund's PM portfolios) such as VGZ, EGO, NSU, AGT, PMU, OZN, RGLD (exeption), etc. that went up. Notice on the chart, EGO and OZN, both as well as many others closing up on the day.

 

I for one certainly continue to hold to the conviction that now we?re past the large options expiration and approaching Tuesday's FOMC, a more heightened awareness of the FED's predicament will follow, and that gold will pretty much be unleashed to climb. And that, looking back, we?ll have just experienced another ?Back Up the Truck August 2007? low in the last week of July 2008. :)

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