Gold And Silver – 2013, 2014, 2015…Expect More Of The Same

by Michael Noonan, Edge Trader Plus Each week, we prepare a selection of newsworthy events to which the current market can explained, somewhat. This week is no exception, save one difference, that being so many want to see/hear some kind of look into the prospects for the year ahead. Our look ahead starts with a rear view mirror look back at 2014. In hindsight, we began 2014 with a positive outlook, but that quickly changed into the view that 2014 could turn out to be just like 2013…no big rally. On that score, we were on point. Before engaging in a review, we have abandoned providing any background news, this week, because for us, the most important news moving forward is found in the six charts that follow. If you are willing to accept the message the market is giving to everyone, you will understand the folly of those who opt to make price “predictions.” Keep in mind, a good many of the experts with the largest followings were touting a price breakout by the end of 2014. None called for new recent lows, and if someone did, our apologies for not knowing who you are. Bottom line: predictions are a waste of time. To the degree that new recent lows developed in 2014, we did not expect that event. This is a more forgiving “miss” because we were not advocating trading the market from the long side, on paper throughout 2014. Strong recommendations to buy physical gold and silver were a constant, on our part. While all purchases for the physical made during the year are higher than current prices, the buy recommendations were always qualified for reasons unrelated to the market trend being down. Would we have held off recommendations to buy during 2014? In hindsight, yes, but we were not prescient enough to see lower lows by year-end. At the same time, we have zero misgivings for purchases made throughout the year just ended because the buys are made irrespective of current price and in anticipation of much higher prices at some point in the future. The purchases were not made for near-term profit, and we stated as much, each time. China and Russia remain avid buyers of as much PM product is available. Check. Strong sales to the public remain for individual ounce coins. Check. The Obomba administration remains as the most destructive wrecking ball for much of the world, especially Iraq, Afghanistan, Libya, an attempt at Syria, and now its coup in Ukraine. Check. The US continues to demand and its subsidiary, the EU, continues to follow along with sanctions against Russia. Check. The Federal Reserve fiat “dollar” continues to lose status as the world’s reserve currency. Check. Obomba continues to provoke Russia into some kind of military response in order to blame Russia for starting a war. Check. It ain’t working. There are so many stories to be told for each of the above situations, and even more compelling stories about how Russia has given the entire West and all its sanctions the “goldfinger.” Credit to Putin for being the single most fighter against the elites and embarrassing them at their own [poorly played] game. We do not know if this is a true quote, but Putin is said to have compared Obama to a pigeon playing chess against him: “He knocks over all the pieces, shits on the board, and then struts away as though he won.” An apt summation. Given the wealth of stories available, we choose to focus on the most compelling one as told by the charts. Keep in mind, when we say charts, they are a reflection of developing market activity that tells the most accurate and current story. It is not a promising one, as of the end of the year and heading into 2015, but it is reality, and to expect anything else will lead to the same disappointments of 2013 and 2014. Forget the ego-driven predictions that have all proven wrong again and again, and deal with what is. To the monthly, we added annual and quarterly price activity. While most never look at a monthly chart, even fewer would ever look at a Quarterly or Annual chart, but they are substantive when looking at market direction. Why? It takes so much more time and effort to alter their course. The annual shows a modestly lower close for 2014 over 2013. For this it can be said the downside momentum slowed, but there is no sign of change, yet. After holding the 1200 area for 5 quarters, price finally gave way to the downside. As with the Annual, the range for Q4 of 2014 was relatively small, and the close was mid-range, an indication of some buying activity, even if only short covering. It has to start somewhere. Bottom line assessment is that there is no indication that the market is ready to turn around, at this point. What this means is to expect more work in the next few months, at a minimum, as price seeks a bottom where demand will take over. The chart comment for the month gives our view at the end of Q3 which shows the value of paying attention to what the market’s message is as determined by reading the charts. Continue Reading>>>

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