In the beginning of this year, we looked at some of the trading errors commonly made by gold investors during this cycle. At the time, gold had fallen 38 percent from its 2011 peak. Yesterday, spot gold traded at less than $1,242 before closing slightly higher.

Gold is hitting new multiyear lows relative to the Standard & Poor’s 500 Index. J.C. Parets, a technical analyst at Eagle Bay Capital, notes: “This downtrend has been very strong over the past 30 months and is hard to fight.”

he key support level, according to Parets, is $1,180. Spot silver has already broken its major support level of about $19. Parets adds that this break in silver could auger a further decline for gold as well, including the mining companies. If you must be long on a precious metal, Parets suggest you consider palladium as an alternative to gold or silver.  Continues here

Category: Cycles, Gold & Precious Metals, Markets, Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Is This the End of the Secular Gold Bull?”

  1. NoKidding says:

    adjective: secular ˈsekyələr’
    1. denoting attitudes, activities, or other things that have no religious or spiritual basis.

    Not sure that definition fits gold buyers. Also the phrase “secular bull” is getting worn out. Why not just call them bull markets?

  2. RW says:

    After years of a strengthening US dollar and extremely low inflation you’d think the yammering about “dollar debasement” and “hyperinflation (any day now)” would slow down but it doesn’t seem to.

    Not sure what it would take to get these folks to actually (a) mark their beliefs to market and (b) publicly admit doing so but until both (a) and (b) are plainly visible their commentary (being polite now) requires a very deep discount.

  3. VennData says:

    Bonds are next. …er…I mean going on now.

    Bonds had their parabolic “1900 an ounce” gold event last week.

    The usual suspects are saying it’s just a hair mussing.

    As long as people invest ideologically, charlatans will happily drill them.

    Ideologue, who are you going to bend over for next time?

  4. ch says:

    Anyone that comments on gold that does not talk about why China is buying 65% of global annual gold mine supplies, why China is advocating pricing gold & oil in yuan (see Bloomberg or RTRS last week) or why Gold Forward Rates have been negative for 130+ of the past 225 trading days when it had been negative for 7 trading days in the 25+ prior years doesn’t understand the gold market and can be safely ignored.

    Gold prices are going to keep falling in USD b/c the USD price of gold is no different than an insurance company selling life insurance but not having the capital to back the claims when people die.

  5. MacroEconomist says:

    Barry, it is most definitely the end of the secular gold for bull. Right now I am playing for high yield to go to 3% YTM and S&P500 to around 35x P/E.

    I am also betting on the Gold:HUI ratio to hit 30x, while GDXJ falls an additional 80% to all time lows.

  6. ByteMe says:

    Barry, the comments over at Bloomberg on your article are an absolute treasure. You can see the fear that just absorbs so many people. If there were more of those people, I might be more bullish on gold, but there’s not, so I’m not.

  7. b_thunder says:

    Maybe it’s over, maybe it’s not. For every buyer there’s a seller. There’s just one thing: there’s been an interesting precedent:

    1. Observe the gold price chart from 1965 to 1976. $35 to $180 to $105 How many people do you think thought the bull market was “no more?”
    2. Observe gold price chart from 2000 to 2014. $300 to $1900 to $1200. Here we go again: the bull market is over.
    3. Observe the gold price chart 1976 to 1980. $105 to $800. How many people do you think wished they’d kept some of their gold positions?
    4. Gold chart 2014 – 20XX???

  8. intlacct says:

    Gold is insurance. Don’t go hog wild but don’t ignore it. Say something less than 5% of the portfolio…

  9. ch says:

    b_thunder – in the 1970s, gold prices were set by gold. Today, gold prices are set by gold derivatives (futures.)

    Because these are levered 100-to-1, they are not gold, they are options on gold. The fact that gold futures have been falling in price since 2011 is not bearish for gold, only for short term gold derivative traders.

    Gold derivatives levered 100-to-1 falling in price does not mean people don’t want gold…it means they don’t want dollars, which is what they will get if they demand gold delivery on futures past a certain date.

    It’s already started – see ABN Amro’s announcement of Apr 2013.

  10. LiberTea says:

    “5. No equity crash: The long-awaited bubble popping hasn’t occurred. Expectations are that once this finally happens, investors will flock back to the precious metals.
    The bottom line seems to be that all of the factors that led to the huge rally in gold from 2001-2011 are no longer present.
    The year isn’t yet half over and gold still could stage a comeback.”

    Sounds like a weather forecast.