April 19, 2021 

Gold Enters Major Bull Market


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 By Michael Miller

09/11/2011  1:57PM

Mathematical based risk/reward summaries specifically created for the benefit of persons or companies interested in gold investment will help a beat up industry sector that remains a mystery to most financial professionals and investor/speculator folks. The old standby of reserves is mostly used; however it has become convoluted beyond value as an inclusive tool. I’ll pass today from going into the real and phony representations about “reserves” due to time constraints.

REAP, you are pondering why Gold mining died in California. The missing ingredient at the Sixteen to One and other locations is working capital, MONEY. To go forward in this discussion, the Sixteen will be the site. The analysis may be applied to other locations but not without tweaking for the most sensitive factors: geology, mineralogy history and location. What should capital look for in assessing the Sixteen or any gold mining venture?

It’s easy: return on capital; duration of time; break even , acceptable and whopping possibilities. Return will be from a cash dividend, a gold dividend or an increase in the price per share of stock. The Sixteen has 13,399,505 shares of common stock outstanding. Gold production measured in ounces or dollars must be divided by this number to gain a perspective for reward. The 2500-ounce day a few years back was valued at $1 million. Today that same day would be about $5 million or $0.35 a share.

How do the big mining companies look using a share outstanding analysis?
Below are shares outstanding from a Reuters Report.
Harmony Gold…..…429,810,000
Anglo American…..1,319,900,000

I don’t have a calculator handy so you do the math regarding what it will take in gold production to use a comparison analysis of reward based on gold production. Gotta go
 By bluejay

09/11/2011  11:35AM


Martin Armstrong is the man that might have some answers or direction for you. Check out his website at http://www.martinarmstrong.org and maybe, send him an e-mail.

Check out his latest paper on the history of direct taxation, "Bound by the Theories of the Past."


Continue your education!

09/09/2011  1:05PM

By education I am a Physicist/Business Consultant. One of my “hobbies” is applying mathematics to business problems. So here is an interesting question….at least to me. How much of the short term changes in the spot price of gold is caused by the degree of instability in the Stock Market?
Gold is known best as a safe haven in times of increasing risk. These days there is a long term and ever increasing risk due to possible Sovereign Debt default, deficit spending and inflation, and a growing realization of how little we can trust in the national and international financial systems. I believe that these are long term problems and will increase, or at least plateau out the price of gold for the foreseeable future. This kind of long term trend is not new and is well understood.
However, in the shorter term, say month to month, or quarter to quarter, the price of gold does fluctuate. And so does the Stock Market, but by larger deviations. The best mathematical relationship of risk, due to stock price variance, compared to the safe “risk-free” Treasuries is the Capital Asset Pricing Model, or CAPM. According to the CAPM formula the more a stock price varies from its average, the greater the risk, and the higher the return on that stock needs to be to offset that risk. The CAPM also applies to the Stock Market as a whole versus Treasuries.
Therefore it seems reasonable to look for a similar relationship between the Market as a whole and spot prices for gold. The greater the variances in the overall Market, the greater the risk; the greater the risk the greater the flight into safe assets like Treasuries and gold; and up goes the spot gold price. If such a relationship does exist, it might be useful for mining companies with sizeable inventories of gold. Has anyone looked for a correlation between the shorter term fluctuations of gold prices and the fluctuations in the overall Stock Market, or various Stock Market Indices? Or better is anyone interested in looking for such kinds of correlations? I’d like to hear your thoughts and comments.
 By bluejay

09/08/2011  10:41PM

Gold $1862.30 UP $46.00
Silver $42.29 UP $ 0.69
Platinum $1843.00 UP $23.00
Gold/Platinum Ratio 1.01
XAU/GOLD Ratio 0.121
Gold/Silver Ratio 44.04

The following was stated by Jeff Clark at Casey Dispatch today:

Governments: The CME hiked margin requirements on gold twice recently and five times on silver earlier this year. At some point a hike could be one too many, prompting investors to slow down on gold and turn to the undervalued equities to capture bigger returns. Another catalyst could be a government announcing they're lowering tax rates on miners - a shock in the current rapacious environment that could see new money pour into the sector overnight.
 By bluejay

09/07/2011  2:08PM

Gold $1816.30 OFF $57.30
Silver $41.60 Off $ 0.36
Gold/Silver Ratio 43.66
XAU/Gold Ratio 0.124 UP 0.006

As gold sold off today, a positive development took place for shareholders of the senior and junior producers. The XAU/Gold ratio advanced from a positive right ascending triangle chart formation. That ratio was up 0.006 at 0.124, surpassing resistance at 0.12. This definately puts added pressure on the shorts with gold falling while being great news for the longs.

The trend of gold and silver over the shares continues to be positive, which is negative for the stocks, but the shares are saying, not so fast as we are ready, willing and able to make up for lost ground.

I was in there today trying to fill an order for a senior gold and it wasn't easy buying shares on the bid side just below prevailing prices with gold sliding.

I believe the gold shares are sending everyone an important message, the tide may be turning.

 By bluejay

09/04/2011  12:05PM

Gold $1884.20 UP $58.80
Silver $43.25 UP $ 1.75
XAU/Gold Index 0.118
Gold/Silver Ratio 43.56

Comments from the Internatioanl Forecaster yesterday: "As we predicted a week ago Wednesday that gold would bottom out Thursday and rally $200 by today(Friday). Spot gold was up $47.70 to $1,873.70, as December rose $55.70 to $1,884.80. We apologize for being off by $15.20. Spot silver rose $1.54 to $43.02 and December rose $1.78 to $43.31. This was accompanied by a statement that the ECB hasn’t ruled out PIIGS gold as collateral for gold backed euro bonds. That was the impetus for the rally. No one considered that the scale of borrowing required is so large that there probably are other ways of trying to deal with the problem rather than gold. Gold could prove to be a drop in the bucket. In this conversation the Central Bank of Ireland said, it will not disclose whether the gold reserves of Ireland, six tons, had been swapped or loaned out, which means they are long gone. What a duplicitous group."

It seems Bob Chapman is more in touch with the short term than Martin Armstrong who stated that last week gold would be in a trading range from about $1700 and $1825.

It is strongly advised that listening to Bob Chapman will be of great benefit for those still seeking a financial education. Access to daily interviews of Mr. Chapman are available at http://www.bobchapman.blogspot.com.

The two most favored gold Indexes, HUI and XAU, continue to lag in relative strength against gold. This lagging has been in process since September of 2010. During the period gold advanced over $600 while the shares have remained, generally, stagnant.

Both Indexes are at intermediate resistance areas or just under them. The HUI has trouble in the 600 to 620 zone and up to 650 while the XAU has problems at 230. The HUI close Friday at 618.30 while the XAU closed out the week at 222.79.

Many analysts suggest that the shares are undervalued. One of these market watchers is the respected Pierre Lassonde the chairman of the Canadian royalty concern, Franco-Nevada Corporation.

The gold and silver shares for months have been under pressure from the hedge funds who have been lessening their risk to their gold positions by shorting the shares. This spread has been profitable for them but people like Jim Sinclair and Bob Chapman have been saying lately that these folks have over-stayed their welcome with the greed factor consuming their better senses.

Somewhere in the future when the adjustment is made back to reality the shares will stage an historical run. It's just a matter of time.
 By bluejay

08/31/2011  4:27PM

Gold $1824.50 DOWN $10.60
Silver $41.57 UP $ 0.22
Gold/XAU Ratio 8.37
XAU/Gold Ratio 0.119
Gold/Silver Ratio 43.89

Martin Armstrong has recently said that he expects gold to be in a $1700 to $1825 trading range. Mr. Armstrong earlier hah spoken of expected weakness in the yellow metal starting in early Septermber. Other analysts are expecting gold to be higher in the months ahead.

It's a mixed bag of nuts over the short term with the bull trend fully intact. Caution seems to be the order of the day for new long term buying of anything gold or silver related.

The XAU Index, representing gold and silver shares along with Freeport McMoran that mines a great deal of copper plus gold and silver, is in position to gain some minor relative strength against gold.

The following is a link to a relative strength chart of the XAU compared to gold.


A right ascending triangle has been forming on the chart over the past four weeks between 0.11 and 0.12. A move above the top of the triangle will be received well by patient investors of this group with higher valuations. Although the overall short term trend continues to remain bearish against the XAU with gold, its shares will benefit some from a price move above the troublesome 0.12 area and possibly, set the stage for continuing better times for shareholders in this sector.
 By bluejay

08/25/2011  8:35PM

Saudi Arabia is a good customer for U.S. debt in exchange for their oil. The Saudi's break-even price for production is $85 a barrel.

Lindsey Williams is predicting, from a reliable source, that oil will rise upwards from between $150 to $200 by the end of 2012. He also states that unpublished, government censored, vast oil reserves in Alaska will come on line at about $200 a barrel.

That equates to gas prices in the neighborhood of $6 to $7 a gallon here for us in the U.S. by the end of next year.
 By martin newkom

08/25/2011  10:13AM

We are told elsewhere that the
US has more oil than all the other
nation/producers combined. We have it in Alaska, continental US
all over. It is politics that
keeps us from really pumping it.
 By Hans Kummerow

08/25/2011  9:03AM

Gold-Price has not changed at all during the last year in Swiss Francs. In Euros it has gained 10% during the last year.

The gold-price-hike-hype in US-Dollars is an obvious result of Bernanke's attempt to drain 14 trillion in debt down the inflation pipe.

Fly to Zurich an enjoy a 10,00 US-$ cup of coffee at the airport lounge. That experience will give you a rough idea, what the US-$ price for a barrel of crude-oil may be as soon as the Arabs get through will their ongoing revolutions.
 By bluejay

08/24/2011  8:17PM

CME Group Raises Performance Bonds(margins) For Comex Gold Futures By 27%
 By bluejay

08/24/2011  1:08PM

Current gold comments by Martin Armmstrong:

 By bluejay

08/24/2011  12:26PM

Gold $1764.40 DOWN $67.80
Silver $39.45 DOWN $ 2.35
Gold/XAU Ratio 8.58
Gold/Silver Ratio 44.65

It appears today that the go-go hedge funds are closing out gold positions directed by their computer software trading programs.

The most price extreme movements in bull markets are short term sell-offs, it's just what happens. Nothing wrong with it, it's just what they do. The opposite is true in bear markets, the biggest short term moves are to the upside.

It is considered that these counter-trend moves are painted to shake people out during bull markets and to suck people in during bear markets. The price movements, when they occur, are routinely used by smart money to saddle up up more of their primary trend positions.

The Gold/XAU ratio continues to favor holding gold and silver over the gold and silver stocks. Some market followers contend that the shares are under-valued. The probabilties point to their being right but more proof needs to be established on the relative strength chart of the two.

The Gold/Silver ratio is another matter. The last on the ratio chart is 44.65 ounces of silver needed to buy one ounce of gold. Some weeks back an historical breakdown occurred when the 60 level gave way which was followed by a crash in the ratio down to about 32. This is when silver nearly hit $50.

A bull market currently exists favoring silver over gold. The 46 level on the ratio chart appears to be a high point until silver begins, again, regaining more relative strength against gold. The CMI Coin Investment spokesperson stationed in Phoenix on last Saturday's Weekly Metals Wrap at King World News is calling for an eventual return to the 16 to 1 spread and possibly, lower to 10 to 1.

If and when gold attains a price of $5000 for example, the lower ratio would put silver at $500 an ounce. Today, silver is under $40, down from $44 a few days ago. Buying silver coins to me, is a "no brainer."

Disclosure: 20% of my liquid assets are in silver coins and 100 ounce bars.
 By martin newkom

08/23/2011  12:15PM

It could be that the dollar could
be a little stronger. The metal
price has gone up on a weak dollar.
 By bluejay

08/23/2011  10:14AM

Gold $1852.00 OFF $46.10
Silver $42.14 OFF $ 1.58

The downward action today in the metal is normal and a deserved time to rest a little for gold, nothing goes straight up forever. A more pronounced percentage decline is certainly in the cards and should be viewed as another buying opportunity.

During the latter part of 1978 gold experienced a heavy sell-off driving prices lower from $455 to about $390. That was a percentage drop of 17% and it still remained healthy enough to trade nearly as high as $900 about 14 months later.

Now as in 1978, we are in a break-out mode and reactions should be bought on a scale down basis with confidence.

For gold to be heading higher sooner rather than later, gold must remain above $1764 for nearly two weeks.
 By bluejay

08/22/2011  4:10PM

Gold $1908.60 UP $55.50
Silver $44.14 UP $ 1.24

I guess James Dines was 100% correct when he said in a King World News interview in July that, "You have to be out of your mind if you're invested in anything but gold and silver."

Remember, it's not so much that gold is higher but more that the value of your money is worth less. Gold is just in a catch-up transition to where it should have been all along. Martin Armstrong said something like this, gold can lag for a long time as it is being suppressed but when it's catch-up time, it can roar.

Bob Chapman has stated many times, that everyone is waiting for a gold correction. What if it doesn't come and gold is revalued overnight? You are either in, or you're out.

For those willing to learn and to do their homework, advice to follow James Sinclair at http://www.jsmineset.com has been a great gift, thank you Jim.
 By Hans Kummerow

08/22/2011  12:47PM

If the price of gold is expressed in a hard currency like the Swiss Frank, the price has increased by 60% during the past five years.
Nothing extraordinary.
 By bluejay

08/21/2011  11:46PM

Gold $1892.30
Silver $43.90
 By bluejay

08/21/2011  11:40PM

Gold $1887.20
Silver $43.75
 By bluejay

08/21/2011  11:28PM

Gold $1881.60 UP $29.50
Silver $43.79 UP $ 0.88

Jim Sinclair has repeated that if the central bankers can't stop the eroding confidence within two weeks in the financial system while gold continues to hold above $1764 then the precious metal will enter stage three of its current bull market. During stage three expect better percentage gains than stage two. I believe stage two advanced 250%.

Bob Chapman says that gold will be selling at $3000 to $3200 an ounce by next February.

It feels like 1979 all over again.

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