Gold on the go and we review 'the crow'
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
A rather special one, this edition of The Gold Update, for in addition to our usual unrivaled read on the price of Gold, at the foot we review a "must read" new book.
But first, Gold indeed is on the go. Recall as penned just a week ago: "...with price having traded down to 1673 -- practically the precise low of the 1789-1672 structural support zone -- as the year unfolds we may find that 1673 level to be Gold's 2021 low..."
That year-to-date 1673 Gold low printed 10 trading days ago on 08 March. With price having settled yesterday (Friday) at 1744, 'tis 71 points above such low of 10 days ago. And across the past 15 years, whenever Gold has settled better than 70 points above its intra-day low from 10 days ago, price's gain within the next 10 trading days has averaged 49 points higher. Or more conservatively, the median gain has been 37 points higher.
So the point is (be it by average or median), we can see Gold from here move up into testing the overhead structural area spanning 1767-to-1963 (which ran from the 30 November low to the 06 January high). If robustly "above average", price en route ought eclipse the presently declining red dots of parabolic Short trend as is their state per Gold's weekly bars from a year ago-to-date:
Further sorting it out, from the "Expected Range Dept.", that for Gold's daily trading range is at present 29 points, whilst the expected weekly trading range is 69 points. Contextually, the distance to the rightmost red dot is 152 points. Remember, that is range not change; but if Gold has now embarked on a new up leg, the above graphic's Short position may well be Long in a month's time, (given the accelerating red dot rate of descent currently 'round -20 points per week).
"Too much information", you say? It just depends how much you're into it. For example per Ian Fleming's "Casino Royale" from back in 1953: "Bond...simply maintained that the more effort and ingenuity you put in...the more you took out." Moreover as we regularly state to those who see the markets as a casino: "The critical edge the trader has over the casino is that markets trend." And that has made all the difference, (thank you Bob Frost, 1915).
Thus in spite of the weekly parabolic trend still well Short, we are constructively becoming more Gold bullish in furtherance to last week's missive "Higher Gold from Here", so 'twould appear.
For here's another promising view, the year-over-year graphic of Gold's price versus (in the upper panel) its smooth valuation line, and therefore Gold's price less valuation (in the lower panel). As you website followers know, the smooth valuation line suggests a level for Gold based on how its price is changing relative to the price changes of the other primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P). The graphic puts Gold at 49 points below this method of valuation, i.e. price near-term is "too low". (Interesting how that matches the aforementioned 49 points "average" ensuing 10-days increase). 'Course by the opening Gold Scoreboard, price today at 1744 is 1978 points "too low" below its 3722 currency valuation level: but that is to where Gold need catch up over the enusing years. Here is "the now":
Speaking of increasing, what's not of late is the Economic Barometer. Oh there were some positive metrics received during this past week, including an ample rise in March's New York State Empire Index and a better than doubling of that for the Philly Fed Index. But here's the but: the month's National Association of Home Builders Index slipped as did February's Housing Starts and Building Permits, and worse, that month's Retail Sales actually shrank (-3.0%) as did Industrial Production (-2.2%) along with Leading (or if you regularly follow the Econ Baro, lagging) Indicators hitting the brakes (decelerating from +0.5% to +0.2%). Bring it all together and the Baro suffered its largest week-over-week loss in the last half year (since that ending 18 September). Still, few really want to hear, see or talk about it, the Biden Vaccine more than mitigating all the negatives (at least per our views of the "news"):
And we had a wry chuckle over this one. As herein penned a week ago: "Scarier still: We know, and you know, that Federal Reserve Chairman Powell, his Fed Presidents and FOMC all know, the stock market is horribly due for a massive blow ... And the FedFolk cannot prevent it." No sooner had our ink dried there than Dow Jones Newswires declared: "Powell Can't Let Markets See Him Sweat" with respect to our otherwise being told the "turbocharged economy" under the new Administration has returned to form; (clearly Chair Powell is eying the Econ Baro rather than the FinMedia).
In fact from watching the progression of the Econ Baro (which as you know is an oscillator more than a nominal measure of the economy's level), it nonetheless has surpassed its depths from COVID (leading into last June), such that if the economy is ever allowed to reopen in full, the expected surge shan't be there, simply because the private sector has already adjusted to carrying on with business as best it can. To be sure the hospitality/travel/entertainment area can improve, but hardly is it comprehensively shut down, nor is it representative of the whole economic pie. Again: has the stock market crashed yet? Just askin'...
Meanwhile, free faux dough remains the order of the day. We find this rich: a Mom and Dad with a combined annual income of $150k and three kids are eligible to receive $7k in stimulus, ($1.4k per parent plus dependents). Clearly no need for assessing need there. Again: has Gold reached 4000 yet? Just askin'...
At least Gold is curving in the right direction, i.e. up! Let's go to our two-panel graphic of Gold's daily bars from three months ago-to-date on the left and the 10-day Market Profile on the right. Price's baby blue dots of linear regression trend consistency continue their climbout, which in having crossed above the -80% axis generated a buy signal as we stated a week ago. The Profile shows the bulk of trading these past two weeks to have occurred in the low 1730s such that 'tis the supportive platform from which we seek higher levels near-term:
And of course here's the like drill for Sister Silver, her "Baby Blues" (at left) also curving upward whilst her most dominant trading supporter appears (at right) as the 26.10 level:
So clearly we see Gold as on the go through here: 1800 seems quite reasonable as an initial goal, however the 1800s in general could well be fraught with much to and fro. But as we always say: "Hang onto your Gold!" And now let's assess "What Became of the Crow?" See below!
Review of Robert Moriarty's just published: "What Became of the Crow? Inside the Greatest Gold Discover in History"
From what begins as a would-be stone's throw (wait a sec, is this a gold nugget that was just naturally lying there on the ground?) at a smart savvy crow is another Mighty Moriarty adventure to unfold toward discovering history's vastest treasure trove of Gold. This is an engaging adventure throughout – but wait – 'tis actually a work of non-fiction, i.e. you can't make this stuff up!
"What Became of the Crow?" is my third Bob Book and right in the classic Moriarty mode as a great gripping read and page-turner, (or if you prefer, finger-flipper, even as yours truly is a slow reader).
The book is a start-to-finish pursuit toward miraculous Gold discovery enabled by the brilliance of its real-life hero Dr. Quinton Hennigh ultimately to the success of Novo Resources amid the stingy and yet generous geology of Western Australia's Pilbara region. "The how" is everything.
Moreover, if you've ever wondered about the wild world of lesser mining companies, the so-called "juniors", mid-tier producers and their common stock and warrants that trade for mere pennies, this is an educative eye-opener in every aspect. Moriarty strips bare the bones of junior miners with the world's greatest gold discovery in the balance. And the book's colourful photographic eye candy of Gold nuggets arrayed in trays, the harsh environment's geology, and the stars of the story at physical work in their element brings you right there into the action!
The book is Moriarty at his best, his chronologically taking us along the truthful trail punctuated with brains, brawn, bargaining and bottles of wine priced beyond belief. Bob's delivery is refreshingly raw, rightly irreverent, and politically incorrect when it ought be, the whole saga replete with winners, losers, flaming a**holes 'n cheaters … and the few prescient good-guys who keep their eyes on the ultimate prize.
Moreover, toward digging beyond Moriarty's robust text is included his substantive bibliography.
So grab your pan and pickaxe, your magnifying glass and metal detector, along with a fistful of A$ and a corkscrew, and join Bob on location through this fabulous and at times frenetic adventure into the parched wilds of Western Australia! For 'tis all about the Gold, baby … oh is it ever!
I loved the book and am smarter for it. (And no crow therein was adversely affected).