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My latest Kitco commentary: Copper & Gold – Fast Eddie’s Lucky Run
COMEX Gold price = $1,651.3/oz (February contract most active)
Eureka Miner’s Gold Value Index© (GVI) = 98.18 (gold value is elevated with respect to key commodities oil, copper and silver)
Value Adjusted Gold Price© (VAGP) = $1,405.3/oz
COMEX - VAGP = $246.0/oz; gold is trading at a premium to key commodities.
Today is the first day of the 14th b'ak'tun of the Mayan Calendar and I guess the world didn't come to an end after all. Thirty three months ago this report predicted the DOW Industrial Average would break 12,901 before the apocalypse - that did happen.
DOW 12,901 by the End of the World? (Eureka Miner's Market Report, 4/01/2010)
This February the DOW broke that level and even with all the woe surrounding the present fiscal cliff negotiations, the mighty average is presently trading at 13,140.79 down 170.93 points from yesterday's close.
In the long run markets are robust even under the harrowing circumstances of the last several years. It's easy (and understandable) to be a pessimist but the market is up over 20% from April Fool's 2010 and that sure beats the return from a bank CD, pardner. I will pass to the next reality an eternal optimist but apparently that won't occur today unless something comes from the heavens this afternoon.
Here's some other fun comparisons from that morning in April to today:
COMEX gold $1,123.4/oz (4/1/2010) $1,651.3/oz (today) up 47.0%
COMEX silver $17.940/oz (4/1/2010) $30.010/oz (today) up 67.2%
COMEX copper $3.5960/lb (4/1/2010) $3.5450/lb (today) down 1.4%
Precious metals have been a better bet than the broader markets; not so, copper.
Enjoy another cup of Raine's delicious Red Label TGIF and have a great weekend.
The Colonel and Mariana wish you all a very Merry Christmas and thank you for following the Report!
The Colonel's Gold, Silver & Copper Prices for Next Week
Here is my input to the Kitco Weekly Gold Survey:
- My target price of $1,675 per ounce is a negative bias below the geometric mean of the given highs and lows for December.
- Given the target gold price, the silver price ranges are derived from the 1-month gold ratio mean (GSR) and its respective ratio stability (CRS©). A similar technique was used to predict the price range for copper since its 3-month correlation with gold is still positive (although the 1-month is negative).
- My Gold Value Index© (GVI) equals 98.18 or 5.3% below the 2012 high of 103.73. Today gold value is below its 1-month moving average of 99.14; a value of 100 represents a historically high-value of gold relative to key commodities oil, copper and silver.
- The gold-to-copper ratio today is 465.81 pounds per ounce and below its 3-month moving average of 478.08 and 6-year trend of 483.58; falling below the long-term trend line is a bullish indication for the red metal; trending above 500 pounds per ounce, bearish (Ref 3). The 1-month gold-to-copper ratio stability is 2.78%. The 1-month rolling correlation is -0.12; 3-month is +0.53. 3-month relative volatility is 1.60X gold and price sensitivity (beta) is +0.86
- The gold-to-silver ratio (GSR) is above its historical norm at 55.025; the 3-month rolling correlation is +0.87, relative volatility is 1.89X gold and price sensitivity (beta) is +1.65. The GSR is above its 3-month average of 52.54; the 1-month gold-to-silver ratio stability is 2.45%.
Write Colonel Possum at email@example.com for answers to your questions or to request e-mail updates on the market