Tuesday, January 10, 2017

This Gold Rally Is Suspicious

Since middle December 2016 gold prices have been going up nicely:


source: www.stockcharts.com

However, this picture is still not supported by gold flows reported by GLD:


source: Simple Digressions and GLD data

For example, yesterday as many as 276 thousand ounces of gold left GLD vaults. Simply put, the American investors are not buying this rally (more - they are selling) and since December 15, 2016 (when the current rally had started) they decreased their holdings by 1.4M ounces. In my opinion, it is quite a large figure.

That is why I have serious doubts about this rally...
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5 comments:

  1. BlueJanuary 11, 2017 at 9:35 AM

    With gold leaving the GLD vaults, and having little impact on the gold price from rising of late, if continue, we can expect to see the very large short positions on COMEX to begin closing.

    This gold is no doubt finding it's way to China, and with the gold price rising with these sales, it may indicate the pricing power now sits with Shanghai, of which a daily arbitrage has been an ongoing occurrence for a while now.

    ReplyDelete
  2. AnonymousJanuary 11, 2017 at 10:22 AM

    SD. you are too doubting. The price of gold is rising even though GLD is selling off gold ounces. With the price of gold rising, they will soon begin to buy. Then we will see the price of gold really RISING.

    And if and when the stock market rolls over and the bond market collapses,, LOOK OUT ABOVE...

    ReplyDelete
    Replies
    1. Simple DigressionsJanuary 11, 2017 at 10:33 AM

      Anonymous,
      Now that is th case - gold goes up and there is less gold at GLD. Hence, my doubts. I would like to see, as you write, "gold really rising".

      Or, alternatively, I may be wrong and GLD stopped working as an indicator (to be honest, I hope it does not work anymore)

      Delete
  3. AnonymousJanuary 11, 2017 at 4:52 PM

    SD,
    I was reading that the 50-WMA on Gold has recently crossed over the 200-WMA, possibly in December. The author then went on to state and show with graphs that this has only once before in the last 16 years.

    The previous time the 50-WMA crossed over the 200-WMA was in 2002, which was the start of the last MAJOR bull market in Gold. He then states that over the next nine years, Gold rose an incredible 429%.

    First of all, I do not know what 50 & 200-WMA are. Are they weighted moving average or weekly moving average. Second, do you put any credence in this cross-over..

    Thanks in advance for any time and effort you put into this cross-over. Willie

    ReplyDelete
  4. AnonymousJanuary 12, 2017 at 6:07 PM

    Chart above and 30 day view is too short term; it's noise.

    Dynamics in US and geo politics are creating alot of anxiety. Gold is the safe haven to escape the volatility.

    Gold likely to continue this slow steady appreciation.

    ReplyDelete

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