Gold Has Further To Fall

This is the typical nonsense headline appearing for the past two weeks. Instead of bottom picking headlines, it seems that a predominance of “further to fall” headlines appear with the most frequency.  Its already a sector that has sustained a long and painful pullback after its early 2016 run for glory, particularly in the mining sector where gains of 300% and more were common. Of course these gains were seen from ridiculous lows in many of the primary producers and mid tiers.

So why all the gloom? Because that is the desired goal. Miners were brought up to a more acceptable price point in 2016. Then all of the “late to the party” new leaves had to endure a severe shake out to test their resolve to the precious metals trade. Of course after gains of 300% the trade had attracted a lot of attention in 2016 and a mere 6 month or so shake out was not going to be sufficient and a more lengthy, brutal beatdown occurred with an “ever-lengthening” accumulation phase playing out in the miners and the metal. 

Sentiment is so bad now, that no one even gives a shit about analysis like this. All the bagholders in this trade just want to get out of their miner positions when their trade turns green.  What interests me at this point is how technicals such as MACD RSI and STOCHASTICS on the metal prices and HUI and GDX all look like a short term bottom is nearing but even the technical traders are afraid of more pain. Well so am I, but that’s what I expect to feel at these junctures (if its a juncture of course).

Bottom line is they want your shares and they can push it all lower to take them. BUT look at what is going on in miners like GORO, AG, EXK, AKG, CDE, and SSRM. There are many others with similar patterns and looking at HUI XAU and GDX show a very different picture which just might not be an accident while the individual quality miners are accumulated. Why are they doing this? I don’t know, but as a confessed CONspiracy theorist I have a few ideas. 

I watched negative headline on my muted Bloomberg screen on metal prices for two weeks. That’s what you see at bottoms. Its not accidental. I pay more attention to following the money and right now the money is buying an awful large number of miners while the headline paper METAL PRICES are moving DOWN. That might mean nothing, but these moves have been quiet, and sustained for about 6 months. No one cares and no one talks about it……….lol……good.