“Personally, I have no idea whether the 103.50 low of August 25 [1976] was THE LOW for gold or not. I would guess, since many experts are now freely predicting a drop below 100, that the 103 level represent the bottom (Russell, Richard. Dow Theory Letters. September 15, 1976. page 5).”
“I just received the September issue of the Bank Credit Analyst and Editor Boeck states that “for the time being, fears of an excessive expansion of the world’s money supply are likely to prove unfounded. Rather, the more realistic worry is the one of contraction. Boeck also notes that the drop in the gold price is deflationary since it shrinks world central bank reserves (Russell, Richard. Dow Theory Letters. September 3, 1976. page 5.).”
Observation: Central banks don’t like declining reserves. The perception of deflation usually ends when it can be clearly identified by the public.
“Everything in the market is timing. Today’s villain is tomorrow’s martyr. Today’s enemy is tomorrow’s ally. Today’s fashion is tomorrow’s abomination. And today’s gold is a fallen idol. But tomorrow or next year or in 1984 gold will again be king. And men will be hoarding it and cursing the fact that they didn’t buy it when it was near $100 back in 1976 (Russell, Richard. Dow Theory Letters. August 11, 1976. page 6).”
Since our October 17, 2014 posting, the price of the SPDR Gold Shares (GLD) has declined –5.69% while the Philadelphia Gold and Silver Stock Index (XAU) has declined –16.52%.
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In the last week gold managed to eek out a gain while gold stocks declined nearly –3%.
Gold was up +2.22% and gold stocks were down as much as –4% and up +4% this past week. Gold stocks, as represented by the Philadelphia Gold and Silver Stock Index (XAU) finally settled at a loss of –1.98%.
Another blowout week with the price of gold (as represented by GLD) declining –2.81% while gold stocks declined as much as –6.61%.
Gold (GLD) was relatively unchanged this past week while gold stocks (XAU) got crushed.
The topic of gold inspires a charged reaction from individuals seeking fiscal and monetary responsibility of their respective governments. This article is an attempt to establish the risks of gold stock ownership in an investor’s portfolio. We will cover the topic of risk by showing the critical periods of correlation and inverse relationship between the stock market, precious metals and gold stocks. We will outline the potential rewards to gold stock investing when gold stock risks are put in the proper perspective.
Posted in gold, gold bugs, Gold Stock Indicator
Gold as represented by the SPDR Gold shares (GLD) and gold stocks as represented by the Philadelphia Gold and Silver Stock Index (XAU) have declined –1.48% and –5.42%, respectively.
Gold and gold stocks are getting decimated in the latest decline. Our Gold Stock Indicator (GSI) is getting very interesting. Below are the GSI for the Philadelphia Gold and Silver Index (XAU) compared to the Barron’s Gold Mining Index (BGMI).
Posted in Barron's Gold Mining Index, BGMI, gold, gold bugs, Gold Stock Indicator, XAU
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Since our last posting, Gold (GLD) and gold stocks (XAU Index) continue to trade in a range as seen below.
Gold and precious metal stocks continue their long road to nowhere with a minor increase of +1.32% in the SPDR Gold Share (GLD) during the last week.
Gold and gold stock continue to remain range-bound as indicated in the chart below.
Our Gold Stock Indicator appears to be registering an unprecedented pattern that has not occurred since the inception of the XAU Index.
Gold and gold stocks had a lot of movement this past week but little to show for it.
Gold and gold stock continued to climb higher in the last week. The gold ETF (GLD) rose +2.90% in the last five days while the gold stock index (XAU) rose +6%.
The Gold Stock Indicator for the same period shows the critical levels that need to be exceeded on the upside.
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