What’s Going on in Gold? Ask Greg Weldon.

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Gregory Thomas Weldon is in his 31st year observing and analyzing the global financial markets.

His pedigree includes a trial-by-fire introduction to the industry spending three-years as the point-man in the COMEX Gold and Silver pits for one of the largest COMEX Gold and Silver floor brokers of the 1970’s and 80’s, Stanley B. Bell and Company.

He left the floor upon the introduction of US stock index futures and international bond futures markets in Europe, and went to work as an institutional broker for Lehman Brothers.

It was at Lehman where Greg met broker-turned-trader Louis Moore Bacon and shortly thereafter left Lehman when Moore Capital was formed. At Moore, under the tutelage of Louis and Zack Bacon, Greg really honed his skills as a trader, purveyor of macro-markets and portfolio-risk manager.

After profitably managing ‘in-house’ money at Moore Capital, Greg made the move to the birthplace of many great traders of that era including Louis Bacon’s mentor, Paul Tudor Jones, Commodities Corporation, where he spent two years as one of the firm’s top performing risk-adjusted traders.

When Goldman Sachs bought out the partnership of Commodities Corporation in 1997, Greg started Weldon Financial, and launched “Weldon’s Money Monitor”, and “The Metal Monitor”, products that have more recently evolved into the all-encompassing “WeldonLIVE (with TradeLAB).” Greg has successfully navigated some of the most treacherous markets in history, most often guiding clients into macro-market trends and profitable trading strategies, repeatedly, year-after-year, over the 18-year history of producing top-shelf, thought provoking, global-macro market research.

Indeed, Greg authored the book “Gold Trading Boot Camp”, published in November of 2006, in which he very accurately predicted that the US credit markets would implode, that the Fed would purchase trillions of dollars of US government debt, and that Gold prices would more than double from their then-level of $550 per ounce. In fact, most everything Greg predicted would happen happened. Moreover, “Gold Trading Boot Camp” is also a “how-to” manual offering insights into the ‘job’ of trading the futures markets.

Greg has appeared on most every financial-focused television channel, and has been a regular in the past on several specific financial market television shows. Greg does the occasional radio interview, and offers customized, in-depth, comprehensive financial market conference presentations and speeches that leave his audience abuzz with a feeling of high-energy, and an abundance of factual information.

Greg’s Website & Subscription Information 

WeldonOnline.com

Weldon Live Subscription Information

Twitter: @WeldonLive

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Sean Brodrick Remains Bullish on Energy Metals

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Sean travels far and wide to seek out small-cap values in the natural resource sector.

His journey started in New England. As a youth he worked on Mt. Washington, on the cog railroad that runs to the summit. Working on the coal-fired, steam-powered trains was hard work but it was also incredible fun, and perfect for someone with an interest in the great outdoors and heavy machinery.

He graduated college with a journalism degree, and experienced the Internet boom and bust firsthand as the personal finance website he worked for suffered a spectacular flameout. The experience of being dumped on the curb with a handful of useless stock options gave him an appreciation for real assets, something he followed up when he joined Weiss Research as an analyst.

Sean left Weiss to become the investment director of the Sovereign Society, the world’s leading publisher of offshore asset protection strategies and global investment. But eventually, Dr. Weiss lured Sean back by promising he could do anything he wanted. What Sean wanted to do was cover natural resources … especially the little-known, undervalued foreign stocks he picked as likely to ride the next wave of the commodity supercycle.

Sean’s travels have taken him from diamond fields north of the Arctic Circle … to a gold project in Argentina … to an ancient city of mummies and silver … to a wild patch of mountains in Alaska where gold flakes still wash down crystal-cold streams.

Now, Sean contributes regularly Uncommon Wisdom Daily’s Morning Edition and Afternoon Edition e-letters. His special reports on precious metals, energy, agriculture and more have gathered accolades from investors and industry insiders alike. And his book, “The Ultimate Suburban Survivalist Guide”, which helps prepares readers for all sorts of physical and economic crises, hit Amazon.com’s best-seller list.

Sean is a biweekly guest on one of Canada’s premier financial websites, HoweStreet.com, and from time to time he makes appearances on various U.S. radio and TV news programs. He contributes to Dow Jones MarketWatch.

Sean’s Columns & Contact Info

Sean’s Columns

Twitter: @SeanBrodrick

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Gold Stocks Break, Gold to Follow

We’ve been persistently bearish on precious metals since September and that has annoyed our readers. The weak price action, negative divergences and bearish fundamentals are too much to currently overcome for the time being. The gold stocks finally cracked this week and have lost another 7%-8% in only the past seven trading sessions. Silver and Gold denominated in foreign currencies have joined the breakdown. Gold meanwhile has not broken down yet but all indications are that it will soon.

The chart below shows the daily candle charts for GDX and GDXJ which began their breakdown on Monday. They have declined sharply over the past seven trading days and are due for a bounce. A ~3% decline would take both GDX and GDXJ down to key support at GDX $21.00 and GDXJ $29.50. The miners are getting oversold and a bounce could begin from those levels.

Unlike the rest of the sector, Gold has yet to crack as it maintains $1260/oz. As we can see below, Gold/FC lost support and traded down to a 4-month low. This, after Gold/FC tested its 200-day moving average seven times. Gold has held above a confluence of major support that includes lateral support and the 200-day and 400-day moving averages. All indications are that Gold will break below $1260 and if it does, look for support at $1205-$1220.

The 30,000 foot, bird’s eye view for miners remains encouraging but they need first to get through the next several months. Initial support levels (for GDX and GDXJ) are $21.00 and $29.50 while future support levels (perhaps in Q1 2018) are around the December 2016 lows. Generally speaking, I’d much rather be a buyer around those levels and not current levels.  

As we publish this article, Gold has broken below $1260/oz and the gold stocks have moved quite close to the initial support levels. I would not be surprised to see the gold stocks and Silver begin to bounce as Gold moves closer to strong support at $1220/oz. That being said, we are not expecting to turn bullish on the sector as a whole until sentiment worsens and the gold stocks approach strong support at their December 2016 lows. Values are starting to emerge in the juniors but it may be too early to be bullish. In the meantime, the key for traders and investors is to find the oversold companies with strong fundamentals with value and catalysts that will drive buying. To follow our guidance and learn our favorite juniors for 2018, consider learning more about our premium service.

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Flash Update (12/7)

The 9-page update was published early Thursday morning and emailed to subscribers and uploaded to the website.

We cover the current technicals and sentiment of the sector. We discuss where a short-term low could form and at which price levels a  sustainable low and a sector buy signal may originate from. We also comment on Novo Resources.

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Interview with Korelin Economics Report: Rising Real Rates Pressuring Gold & Silver

Jordan Roy-Byrne joins me today to outline some of the factors that have us concerned about the metals markets. We discuss short and long term yields as well as real interest rates. Also a look at some of the largest mining company charts we are seeing these break to new lows for the year. This could all be the fall washout of the year for metals but that action of the stocks are a cause for concern.

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TheDailyGold Premium Update #547

TheDailyGold Premium Update #547 was published, emailed to subscribers and uploaded to the website early Sunday morning.

The 27-page update includes an updated company report (on a junior explorer/developer who we think has big upside potential over the coming years. We are already profitable on the position. It is one of our favorite companies. The update also includes notes on three other companies. These things are on pages 3 through 9.

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Flash Update (11/29)

The 7-page flash update has been published, emailed to subscribers and posted to the website.

In this update we cover the short-term technicals of the precious metals sector as well as a few stocks. One company we hold and recently recommended as a buy, reported strong drill results and the stock gained positively. We mentioned a different company we are adding to our watch list. It is down over 50% from its high, trading at a reasonable enterprise value and will have a catalyst in Q1 2018. Finally, we commented on Novo Resources’ technicals and a target buy price for another company we own.

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Gold Fundamentals Not Bullish Yet

Too many technical analysts dismiss fundamentals. True, technicals usually lead fundamentals but understanding the fundamental drivers (when it comes to Gold) can give you an edge. Gold and gold stocks have remained below their 2016 peaks even in the face of a very weak US Dollar because the fundamentals are not there. Real rates have been stable in 2017 while the yield curve has been flattening. Until things change, Gold and gold stocks have little chance to breakout.  

If you follow my work you know that there is a strong inverse correlation between the Gold price and real interest rates. Gold performs best when real rates are declining and especially when real rates decline while in negative territory. Real rates declined sharply into and during 2016 but have been rising or stable this year. The current problem for Gold is nominal yields have trended higher and faster than the rate of inflation.

In the chart below we plot Gold, the real 5-year yield (as calculated from the TIPS market) and the real Fed Funds Rate (rFFR). The US Treasury provides daily data of the real 5-year yield and we can see that it has trended higher since summer 2016 and is currently at its highest levels since Q1 2016. It has advanced nearly half a percent since its low a few months ago. Meanwhile, the rFFR has increased by more than 1% this year. That was after falling by nearly 2%.

As we discussed weeks ago, a steepening yield curve (caused by falling short-term rates or rising long-term rates) is bullish for Gold. Some gold bugs are excited about a flattening yield curve as it could lead to inversion. While this may be true, a flattening curve is not bullish for Gold. Below we see that the yield curve continues to plunge (flatten) as the 2-year yield has surged and the 10-year is at the same level as two months ago. A bullish development for Gold would be the 5-year and 10-year yields exploding above their March 2017 highs while the 2-year yield arrests its torrid rise.  

Gold and gold stocks are going to continue to struggle until the fundamentals align bullishly. Market action will of course lead fundamental changes but knowing the drivers to look for can help us anticipate the fundamental changes in advance. We think rising inflation is more likely than falling short-term rates to be the driver for Gold in 2018. In that case, we would anticipate hard assets to perform better, long-term rates to rise faster than short-term rates and inflation to outpace short-term rates. These things would sustain Gold beyond just a few months. In the meantime, the key for traders and investors is to find the companies with strong fundamentals and seek oversold situations with value and catalysts that will drive buying. To follow our guidance and learn our favorite juniors for 2018, consider learning more about our premium service.

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When is Gold Ever Going to Breakout?

In this interview I spoke with Jordan Roy-Byrne of thedailygold.com to talk about an article he posted here.

Gold and gold mining stocks have been going sideways all year now and people have forgotten about them and do not care about them. It will take a key rally through $25.50 on the GDX to make people want to buy as now all that matters to people in the markets is pure price action. They need to see rising prices to want to buy. So when is this ever going to happen? I talked about that big question with Jordan.

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