Is Gold in a 6000 Year Bubble?

Posted by Patrick Ceresna on Dec 8, 2014 7:13:24 AM

The other week Willem Buiter, Citigroup’s chief economist, grabbed the news headlines stating that gold bullion is in a 6,000 year bubble. The statement is based on his belief that gold has no intrinsic value. Mr. Buiter went on to exclaim that, “Gold has become a fiat commodity or a fiat commodity currency, just as the U.S. dollar, the euro and the yen.” He continued, “The main differences between them [fiat currencies] are that gold is very costly to produce, while the production of additional paper money has an extremely low marginal cost.”

Is this for real?  Gold bullion is no different from fiat currencies?

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Topics: Gold, Bubble

Is a Market Decline Imminent? 5 Critical Things to Consider

Posted by Patrick Ceresna on Sep 11, 2014 10:54:00 PM

Back on August 11th, we published our blog suggesting the market swing low was in and that a multi-week rally was likely.  1 month later, the S&P500 has now crested the 2000 level and has begun a short-term consolidation. We are now trying to discover if there is increasing risk of a market reversal and selloff or if the market is just taking a break prior to continuing to advance. 

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Topics: s&p500, Gold, Crash Alert

Second Quarter Forecast: Commodities and Gold

Posted by Patrick Ceresna on Mar 18, 2014 6:00:00 AM

This is the "Part 2" of a "4 Part" blog series - The Second Quarter Forecast.
In Part 1 of our forecast we tackled the current landscape of the global currency markets. International trade of commodities is predominantly transacted in U.S. dollars, making the price movement of the U.S. Dollar a key precipitating factor in the value of commodity prices and the subsequent inflationary/deflationary impact upon an economy. When reflecting upon the prices of commodities over the last several years, it can be generalized as a big chaotic muddle. This "chaotic muddle" is being driven by two conflicting forces - a slowing global economy (generally weakening commodities like copper, iron ore and oil) and a weakening U.S. Dollar that generally leads to a nominal rise in commodities prices. This "chaotic muddle" could turn decidedly bearish for commodities if our bullish dollar forecast comes to fruition. This was a core foundation of our annual forecast and remains  a core thesis for our Second Quarter Forecast.      

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Topics: Market Forecast, Gold, oil, euro, U.S. Dollar, commodities

Buy the Dip and Gold Mining Stocks Breaking Out

Posted by Patrick Ceresna on Feb 10, 2014 11:54:00 AM

In our last blog we discussed the similarities of the current pullback to the 4 pullbacks of 2013.  Each 2013 pullback has been a 4-6% correction that had the buy on dip traders come back with a vengeance.  We were highlighting the support in the 1750.00 area on the S&P500 March futures. 

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Topics: Gold, gold mining stocks, market pullback

The Moment of Truth for the S&P500 and Gold

Posted by Patrick Ceresna on Jan 28, 2014 5:31:00 PM

We are at the moment of truth. The S&P500 is in a similar oversold state that preceded market rallies throughout 2013. In 2013, after each brief 4-7% multi-week correction, the buy on dip traders jumped in and bought with a vengeance. If this pullback is going to be a buy on dip, it could happen off this area in the 1750.00-1770.00 zone. The McClellan Oscillator is currently oversold below the -50 level. The September and December "buy on dip" opportunities started with the McClellan Oscillator at these exact oversold levels. 

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Topics: s&p500, Gold, gold mining stocks

Can the Shine Return to Gold?

Posted by Patrick Ceresna on Jan 10, 2014 11:12:00 AM

Over the last 3 years we have witnessed one of the most severe gold miners bear markets in history.  It has been an indiscriminate decline that has broken the will of the retail investor.

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Topics: Gold, gold mining sector, gold miners

What does US Steel have In Common with Gold Stocks?

Posted by Patrick Ceresna on Nov 20, 2013 4:26:00 PM

Over the last 6+ months we have been prematurely looking for a bottom in gold stocks.  It is human nature to want an investment to immediately validate your purchase by increasing in price. Inversely, there is substantial amount of emotional and financial stress that is associated with the investment continuing to decline and a prolonged depression of being trapped in a losing investment. The interesting part is that the very best buying opportunities occur when an investor feels the most dreadful about their investment.  In fact the only time you can make the absolute most money in a stock is when there are no investors left to sell and therefore the downside risk is mitigated. When all the short sellers have already sold short there fill and the weak hand investors have been margin called or capitulated into a depressed sale of their shares, the stocks entire float becomes held by the strong hand investors. 

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Topics: Gold, gold mining stocks, GDX, US Steel

Gold Bear Market and S&P500 Levels

Posted by Patrick Ceresna on Oct 2, 2013 9:54:00 AM

Anyone that has owned gold stocks over the last 2 years is probably sick of hearing bull arguments and frustrated seeing the stock’s decline with such severity.  This is an indiscriminate gold miner bear market that is now leaving investors confused as ever. But when going through history, it is surprising how common it has been for the gold mining stocks to go through these bear market declines. In the last 40 years there were 6 distinct gold stock declines that wiped out 50-77%. 

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Topics: s&p500, Gold, gold mining, buy gold

The Fed, Market Forecast S&P500, Bonds and Gold

Posted by Patrick Ceresna on Sep 19, 2013 9:02:00 AM

WOW.  It wasn’t that the Fed didn’t taper.  The message was that economy is in no state to begin tapering any time soon.  The bottom line is that the media pundits and analysts were dead wrong. In our past blogs and presentations we have maintained that the Fed will never be able to exit.  We will have further follow up presentations to explain.

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Topics: Market Forecast, s&p500, bonds, Gold, Fed Tapering

S&P500 Market Forecast and Is Gold a Buy on Dip?

Posted by Patrick Ceresna on Sep 13, 2013 8:27:00 AM

The short term momentum is being driven by a good short squeeze as bulls drive the market higher, but we are already overbought on short term indicators. We will on a short term basis be trading higher, but if we start to see failed rally attempts to the upside, it will be an important clue that big money traders are distributing into the strength.

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Topics: Market Forecast, s&p500, Gold, buying gold

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