GoldMinerPulse: Market Sentiment Track Record
Chart for 28 March 2013 market close plus outlook for week ending 5 April 2013.
GoldMinerPulse Market Sentiment (MS) Metric Track Record
28 March 2013 View After Market Close: MS Up Turn From Multi-year Lows Continues To Build
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The multi-year MS low from 15 March 2013 is holding with higher highs and higher lows forming in the short time since.
During March 2013, the Shanghai Gold Exchange (SGE), the exchange I believe is now the premier gold exchange in the world for buying large quantities of
physical gold, set both monthly and daily delivery records:
Record Gold Delivery in One Month: 328 tons, March, 2013.
Record Gold Delivery in One Day: 35.7 tons, 22 March 2013.
The March, 2013 Canadian budget documents included the language of a Cyprus style "bail-in" as a contingency plan in the event of bank failures
(see page 145 in Economic Action Plan 2013, Tabled in the House of Commons By
the Honourable James M. Flaherty, P.C., M.P. Minester of Finance, March 21, 2013) which suggests, that the idea of a "bail-in", was an idea hatched
at a G8 or G20 meeting.
Anyone holding funds in a G20 bank in excess of deposit insurance levels should take careful note -- since a Cyprus style bank holiday event could happen
even in a so called safe currency country such as Canada, I do not see the price of gold falling much from current levels. Rather the gold at current prices
is, in my opinion, likely to be viewed as very cheap in the years to come.
The Kitco Gold Survey of market participants
completed 28 March 2013 has 63% of the participants bullish while
22% are bearish and 15% neutral. Taking the Kitco survey results as a contrary indicator suggests next week is more likely to be neutral or bearish.
Outlook for Week Ending 5 April 2013
The 28 March 2013 up tick in MS, with higher lows and higher highs since the 15 March 2013 multi-year low in MS,
suggests a MS bottom is forming halting the downtrend dating back from 5 October 2012. The formation of a new uptrend is however unlikely, since the
price of gold (POG) is moving opposite to the MS uptrend over the last week.
The strong physical gold delivery on the SGE suggests that POG is unlikely to drop significantly -- SGE has delivered more gold for 2013 year to date than
the world's gold miners have produced year to date -- since physical delivery can not be met by the paper gold trading on other commodity exchanges
around the world. At some point, the demand for physical, can be reasonably expected to trigger a sustained up move in the POG.
As reported for the last few weeks, I continue to believe now is an excellent time
to add to physical gold holdings and for additional leverage to add to gold and silver producer equitites (this is opinion and not investment advise). When the MS trend
does turn up, I believe current gold and silver equity prices will be viewed as recognized as great bargains.
The key metric to watch for next week is the price premium and daily delivery quantities for gold on the SGE -- see
Shanghai Gold Exchange (SGE) Physical Gold Delivery for daily updates.
GoldMinerPulse Calls From Past Friday Market Closings
2013-03-22
-- MS Up Slightly From Multi-year Lows
2013-03-15
-- MS Continues to Make Multi-year Lows
2013-03-08
-- MS At Multi-Year Low
2013-03-01
-- MS Hitting Lows Not Seen Since July 2012
2013-02-22
-- Up trend from 20 December 2012 Failed
2013-02-15
-- Up trend from 20 December 2012 Confirmed
2013-02-08
-- Up trend from 20 December 2012 Still Holds
2013-02-01
-- Up trend from 20 December 2012 Still Holds, But Is Weakening
2013-01-25
-- Up trend from 20 December 2012 Still Holds