Gold breaks $1,300, McEwen Mining (MUX) Pops to $2.32; Happy New Year!

Early Windfall Mine

Many treasures like this at the Eureka Sentinel Museum!
Eureka, Nevada

Please read the latest Mining Quarterly!

Friday, December 29, 2017 AM

Morning Miners,

As the market year comes to a close, gold and copper are on a tear - miners too!

Comex gold touched $1,307 per ounce in morning trading and Comex copper scored a new high at $3.322 per pound yesterday. The red metal has been marching higher since early-December falling back only slightly today to $3.289. Some of the rally is U.S. dollar weakness as the euro crests 1.20 and Nymex oil sticks its head above $60 per barrel. The greater driver for the red metal are expectations for a pickup in U.S. growth in 2018 bolstered by a robust global economy and the possibility of increased domestic infrastructure spending. The same forces that propel copper up may push gold down if rising interest rates outpace inflation. 

For my current thoughts on gold please read my input to the Kitco News Weekly Gold Survey (below) and latest column:

The Gundlach Indicator Restored - Gold, Copper and Interest Rates (December 27, 2017, Kitco News)

A very strong run into the finish for miners (daily high in parentheses):

McEwen Mining (MUX) $2.295 ($2.320)

Barrick Gold (ABX) $14.54 ($14.56)

Newmont Minining (NEM) $37.62 ($37.76)

Freeport McMoRan (FCX) $19.075 ($19.446)

Happy New Year!

Scorecard for the last-half of 2017

Here's our scorecard on where we stand for the last-half of the year:

Intraday highs on the Comex futures exchange: 

Gold $1,362.4 per ounce September 8, 2017 (December 2018 contract)

Silver $18.290 per ounce September 8, 2017 (December 2018 contract)

Copper $3.3220 per pound ($7,186 per tonne) October 16, 2017 (March 2018 contract)

Comex copper is presently trading at a $3.2890 per pound, just below yesterday's new high. Improving global growth has kept the red metal above the key $3 per pound level with an added boost from passage of Tax Reform and expectations for U.S. infrastructure spending. All eyes remain on China to see how growth prospects shape up. LME inventories have seen an uptick and are now leveling off as the year comes to a close:

It is instructive to keep our eyes on the Comex inventories which now exceed the LME after a healthy bounce (211,372 versus 202,100 tonnes)

And, again the chorus of our very tiresome molybdenum song,  "LME Moly Oxide remains on snooze alarm at $7.26 per pound. This is disappointingly short of $8 after climbing to $7.94 for much of May." 

My Input to Kitco News 

Here's how I saw the weekly price action as told to the Kitco News Weekly Gold Survey:

My vote is up. Target gold price $1,290 per ounce. Target Silver price $16.8 per ounce.

On a thinly traded week, gold is closing the year in a strong position currently above $1,300 per ounce. This scores a respectable 15% gain for the year*. In terms of weekly gains, the yellow metal is finishing ahead of the Japanese yen and euro and industrial metal copper. This is even more impressive considering that the euro and red metal have been in a strong rally mode against a falling U.S. dollar.

I think it likely there will be some consolidation around the $1,290-level next week with silver following gold lower to $16.8 per ounce. Let's assume 2018, like 2017, is a mix of buoyant market expectations and rising rates with occasional geopolitical, political and economic shocks. Gold will feel the headwinds of the former and enjoy price spikes in times of market stress. I believe this will secure a price floor in the $1,200 to $1,250 range with highs challenging but not exceeding the September Comex high of $1,366 per ounce.

2018 will prove a less bullish period for gold than this year unless interest rates are contained near present levels and copper prices fall - a less likely scenario given U.S. growth and synchronous global recovery expectations.

Additional Note:

The fate of the Chinese yuan remains a key tell for gold and copper - a material drop in valuation could boost gold and depress copper prices. The yuan has stabilized below 7 USD/CNY for 2017 and generally grown stronger. The yuan is stronger than last week at 6.5025 USD/CNY and now only 1.0% above its low (i.e. its strongest level) for the year of 6.4345. A 1-month yuan volatility of 0.55% is in the ballpark of major currency levels - a healthy sign for the Chinese currency (1-month volatilities of euro, yen and gold*).

Merry Christmas & Happy Holidays!

* the euro & yen 1-month volatilites are  0.57% & 0.37% respectively; Comex gold 1-month volatility is 1.40%.

Weekly Summary  for December 29, 2017 AM 

(click on table for larger size)

Yearly Summary for 2017

(click on table for larger size)

Comex gold gained nearly 14% for the year but was outpaced by Comex copper that enjoyed a 32% uptick in price. Comex silver lagged both for a  respectable 7.2%. Overall, gold gained 12% on the broader Bloomberg Commodity Index (BCOMTR:IND) which includes everything from crude oil to things that oink. In terms of major currencies, gold in terms of yen advanced almost 10% but slipped 0.4% relative to the strengthening euro.

Although gold slipped 5% in value relative to the S&P 500 it was not a bad year at all for the yellow metal!

Gold Price Outlook for 2018:

My revised gold range for 2017 was $1,250 to $1,400. It looks like we'll close the year today comfortably above $1,300.

Let's assume 2018, like 2017, is a mix of buoyant market expectations and rising rates with occasional geopolitical, political and economic shocks. Gold will feel the headwinds of the former and enjoy price spikes in times of market stress. I believe this will secure a price floor in the $1,200 to $1,250 range with highs challenging but not exceeding the September Comex high of $1,366 per ounce.

2018 will prove a less bullish period for gold than this year unless interest rates are contained near present levels and copper prices fall - a less likely scenario given U.S. growth and synchronous global recovery expectations. Inflation will be another key factor to monitor.

Here's a good beer bet for 2018: Gold will fall below $1,220 before rising above $1,380. We're right in the middle of that range with this morning's rally above $1,300 - a fair starting point 

[Update: Comex gold closed at $1,309.3; intraday high $1,309.8, February contract]

Which side of this bet you take depends on whether you have a half-full or half-empty view on interest rate direction and economic prospects, both global and domestic.

Two important charts to watch remain the gold-to-S&P500 or AUSP (see "Chart to Watch" below) and gold in terms of major currencies euro and Japanese yen (directly below).

Click on the image for a larger size:

Gold in euro & yen terms with good margin above 2013 lows

Note for currency buffs: Value parity in the above chart occurs when the EUR/JPY cross rate is 139.24; something to watch for - presently 134.92 yen per euro. 

Chart to Watch

Here's a chart to watch for 2017. Click on the image for a larger size:

Gold-to-S&P 500 Ratio

An important gold ratio is gold-to-S&P500 or AUSP. The ratio bottomed in early-December of 2015 and reversed to a bullish trend, peaking February 11, 2016. It bottomed again December 20, 2016 trended higher but then bearishly bottomed again July 7, 2017 (0.4989) and more recently December, 12, 2017 (0.4661). Currently this AM the AUSP is 0.4864 - still bearishly below the key 0.5-level but rebounding nicely from the mid-December low.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted.

Bitcoin Collapses, Gold Bounces $1,278; Merry Christmas!

The Terror is Over (Noozhawk photo)

Santa Barbara, California

Friday, December 22, 2017 AM

Morning Miners,

The Eureka Miner has been offline for several week's as the ole Colonel's attention has been on California's second largest fire threatening both Santa Barbara and Ventura counties (272,000 acres to date). Mariana and I are now safe in our second home in Santa Barbara's foothills. Saturday was very scary as the fire came very close to our house.

That Sunday we cautiously ventured out to Joe's Cafe on State Street. Two firefighters came in and sat down at the table next to our booth - both were from Carson City! Later I told our waiter that we would like to pick up their tab. She said that they were already covered by an older gentleman at the bar. The night before he had treated 35 firefighters. The community support for the firefighter's brave efforts has been tremendous.

One patron asked the Carson City boys whether they were exhausted after days of 24 hour shifts. In typical Nevada style the lead replied, "Naw. It's hard on the new guys, we're used to this stuff." 

Simply, the best.

There were many other Nevada firefighters deployed to fight California wild land fires:

RENO FIRE DEPARTMENT HELP BATTLE FIRES IN SOUTHERN CALIFORNIA (The Nevada Sagebrush, 12/12/2017)

Bitcoin Collapses, Gold Bounces $1,278

This morning's trading may be a harbinger of things to come in 2018 with the dramatic drop in Bitcoin and bounce in gold. The wildly popular and speculative Bitcoin has recently seen volatile declines starting today with a 20% drop. It has lost roughly one third of its value in 24 hours.

Presently, Comex gold is trading at $1,278.0 per ounce just shy of its $1278.8 high for the day. By the time you read this there may be a new high in place. Please read my input below to the Kitco News Weekly Gold Survey (below) for further analysis.

Digital currencies are no doubt here to stay and eventually will compete with the yellow metal as an alternative store-of-wealth. Although their recent parabolic rise in value is collapsing to gold's advantage, it is likely only the first chapter is a very long story. The venerable NYSE Art Cashin quipped yesterday that there will be a day when we stop carrying paper around with pictures of dead presidents. My theory is that so-called cryptocurrencies will follow the same path as tech stocks: wildly popular until a big crash then slowly popular again as technology eventually catches up with early expectations (internet-of-everything, online shopping, social media etc.). Currently it looks like we are headed for the "bull trap" side of a Bitcoin crash following this classic chart of bubbles:

(click on graph for larger size)

The big question is whether gold investment may indeed be headed for secular decline. We will explore this more fully in 2018. For the holidays, here is some interesting reading by renowned commodity journalist Debbie Carlson:

Will Bitcoin Futures Legitimize Cryptocurrencies? (Debbie Carlson, U.S. News, 12/14/2017)

Scorecard for the last-half of 2017

Here's our scorecard on where we stand for the last-half of the year:

Intraday highs on the Comex futures exchange (all December contracts):

Gold $1,362.4 per ounce September 8, 2017

Silver $18.290 per ounce September 8, 2017

Copper $3.2595 per pound ($7,186 per tonne) October 16, 2017 

Comex copper is presently trading at a $3.2395 per pound, just below October's high. Improving global growth has kept the red metal above the key $3 per pound level with an added boost from passage of Tax Reform and expectations for U.S. infrastructure spending. All eyes remain on China to see how growth prospects shape up. LME inventories have seen an uptick lately:

It is instructive to keep our eyes on the Comex inventories which now exceed the LME with a healthy bounce (210,486 versus 201,150 tonnes)

And, again the chorus of our very tiresome molybdenum song,  "LME Moly Oxide remains on snooze alarm at $7.26 per pound. This is disappointingly short of $8 after climbing to $7.94 for much of May." 

My Input to Kitco News 

Here's how I saw the weekly price action as told to the Kitco News Weekly Gold Survey:

My vote is up. Target gold price $1,260 per ounce. Target Silver price $16.1 per ounce.

Gold bounced nicely from the dramatic decline in Bitcoin this morning. The release U.S. economic data which included inflation and durable goods had little impact on price. We can expect more volatility from holiday trading as the end-of-the-year approaches.

I believe it likely some of this bounce will wear off next week as gold settles above the key-$1,250 level for the year - my target price is $1,260 per ounce. Silver should prove resilient around $16.1 per ounce. 

This morning's trading may be a harbinger of things to come in 2018. Digital currencies are here to stay competing with the yellow metal as an alternative store-of-wealth. Although their recent parabolic rise in their value is collapsing to gold's advantage, it is likely only the first chapter is a very long story. Another important thing to watch is the interplay of rising interest rates and inflation rate expectations given a pickup in U.S. GDP. If the former gains on the latter; gold could face serious headwinds in the year to come.

Additional Note:

The fate of the Chinese yuan remains a key tell for gold and copper - a material drop in valuation could boost gold and depress copper prices. The yuan has stabilized below 7 USD/CNY for 2017 and generally grown stronger. The yuan is stronger than last week at 6.5756 USD/CNY and now 2.2% above its low (i.e. its strongest level) for the year of 6.4345. A 1-month yuan volatility of 0.20% is in the ballpark of major currency levels - a healthy sign for the Chinese currency (1-month volatilities of euro, yen and gold*).

Merry Christmas & Happy Holidays!

* the euro & yen 1-month volatilites are  0.45% & 0.59% respectively; Comex gold 1-month volatility is 1.26%.

Weekly Summary  for December 22, 2017 AM 

(click on table for larger size)

Gold Price Outlook for 2018 (coming soon!):

My revised gold range for 2017 was $1,250 to $1,400 and it looks like we are headed to the lower end of that range as this year comes to a close. A new outlook will be posted soon for 2018.

Two important charts to watch remain the gold-to-S&P500 or AUSP (see "Chart to Watch" below) and gold in terms of major currencies euro and Japanese yen (directly below).

 A fall below $1,260 is bearish; below $1,230, very bearish.

Click on the image for a larger size:

Gold in euro & yen terms with good margin above 2013 lows

Note for currency buffs: Value parity in the above chart occurs when the EUR/JPY cross rate is 139.24; something to watch for - presently 133.13 yen per euro. 

Chart to Watch

Here's a chart to watch for 2017. Click on the image for a larger size:

Gold-to-S&P 500 Ratio

An important gold ratio is gold-to-S&P500 or AUSP. The ratio bottomed in early-December of 2015 and reversed to a bullish trend, peaking February 11, 2016. It bottomed again December 20, 2016 trended higher but then bearishly bottomed again July 7, 2017 (0.4989). Currently this AM the AUSP is 0.4748 - still bearishly below the key 0.5-level.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted.

Gold Dips to $1,244 after Upbeat Jobs Report; Troubling Signs for Gold

@ Clouds
Eureka, Nevada

Friday, December 08, 2017 AM

Morning Miners,

Watching gold price reverse below $1,260 yesterday was not a happy.

Presently, Comex gold is trading at $1,254.0 per ounce up from a $1,244.4 low following an upbeat monthly jobs report. For an explanation of what this portends for the Lustrous One, please read my input below to the Kitco News Weekly Gold Survey (below).

Of course in economic terms, we should be glad to see encouraging news from the Labor Department. November added a robust 228,000 jobs compared to an expected 195,000. Headline unemployment remained unchanged at a low 4.1%. The response of stronger U.S. dollar and environment for rising interest rates is a major headwind for gold prices. More troubling is the rotation of money away from the yellow metal to booming global stock markets and speculative crypto-currencies like Bitcoin. Some part of this "risk-on" boiler is going to blow one of these days.

Here's a number to ponder: the average monthly job growth in 2016 was 187,000. The monthly average for 2017 is 174,000. A booming December report could help close the gap, maybe.

Here's our scorecard on where we stand for the last-half of the year:

Intraday highs on the Comex futures exchange (all December contracts):

Gold $1,362.4 per ounce September 8, 2017

Silver $18.290 per ounce September 8, 2017

Copper $3.2595 per pound ($7,186 per tonne) October 16, 2017 

Comex copper is presently trading at a $2.9720 per pound, below October's high and 1.8% down for the week. Improving global growth had kept the red metal above the key $3 per pound level but it experienced a sharp reversal to the downside Tuesday (12/5). All eyes remain on China to see how growth prospects shape up. LME inventories have seen an uptick lately:

It is instructive to keep our eyes on the Comex inventories which now exceed the LME but are leveling off (208,699 versus 193,675 tonnes)

And, again the chorus of our very tiresome molybdenum song,  "LME Moly Oxide remains on snooze alarm at $7.26 per pound. This is disappointingly short of $8 after climbing to $7.94 for much of May." 

My Input to Kitco News 

Here's how I saw the weekly price action as told to the Kitco News Weekly Gold Survey:

My vote is up. Target gold price $1,250 per ounce. Target Silver price $15.8 per ounce.

A horrible week for gold.

Dipping to lows not seen since mid-year, the gold retreat reflects a move to "risk-on" assets exacerbated by a better-than-expected U.S. jobs report. With global equity markets booming again, the value loss to the benchmark S&P 500 scored a new low after the Labor Department numbers for November. There will likely be some skirmishes around the key $1,250-level next week but the outlook is not encouraging; a retest of this morning's $1,244 low followed by further descent towards $1,225 territory is possible as 2017 comes to a close.

Most troubling is this week's breakdown of one of gold's most enduring uptrends for 2017. Gold in terms of Japanese yen has enjoyed a succession of higher lows since the U.S election. That has now come to an end with gold losing nearly 2% in value to the yen this week. This is important because the Japanese currency often competes with gold for safe haven status. The uptrend collapse is an ominous turn for the lustrous metal. 

An ounce of gold does buy more copper this Friday than last week - one of the few positives as the latter fails to hold the key $3 per pound-level. A retreat in commodities since early November has generally favored gold. The yellow metal gained on the broader Bloomberg commodity index (BCOM) 0.6% for the week.

Silver should follow gold lower next week to $15.8 per ounce.

Additional Note:

The fate of the Chinese yuan remains a key tell for gold and copper - a material drop in valuation could boost gold and depress copper prices. The yuan has stabilized below 7 USD/CNY for 2017 and generally grown stronger. The yuan is only slightly weaker than last week at 6.6179 USD/CNY and now 2.9% above its low (i.e. its strongest level) for the year of 6.4345. A 1-month yuan volatility of 0.19% is in the ballpark of major currency levels - a healthy sign for the Chinese currency (1-month volatilities of euro, yen and gold*).

Have a great weekend!

* the euro & yen 1-month volatilites are  0.73% & 0.66% respectively; Comex gold 1-month volatility is 0.99%.

Weekly Summary  for December 08, 2017 AM 

(click on table for larger size)

Gold Price Outlook for 2018 (coming soon!):

My revised gold range for 2017 was $1,250 to $1,400 and it looks like we are headed to the lower end of that range as this year comes to a close. A new outlook will be posted soon for 2018.

Two important charts to watch remain the gold-to-S&P500 or AUSP (see "Chart to Watch" below) and gold in terms of major currencies euro and Japanese yen (directly below).

Warning from this week's gold survey (above): Most troubling is this week's breakdown of one of gold's most enduring uptrends for 2017. Gold in terms of Japanese yen has enjoyed a succession of higher lows since the U.S election. That has now come to an end with gold losing nearly 2% in value to the yen this week. This is important because the Japanese currency often competes with gold for safe haven status. The uptrend collapse is an ominous turn for the lustrous metal. 

 A fall below $1,260 is bearish (we're there!); below $1,230, very bearish.

Click on the image for a larger size:

Gold in euro & yen terms with good margin above 2013 lows

Note for currency buffs: Value parity in the above chart occurs when the EUR/JPY cross rate is 139.24; something to watch for - presently 133.13 yen per euro. 

Chart to Watch

Here's a chart to watch for 2017. Click on the image for a larger size:

Gold-to-S&P 500 Ratio

An important gold ratio is gold-to-S&P500 or AUSP. The ratio bottomed in early-December of 2015 and reversed to a bullish trend, peaking February 11, 2016. It bottomed again December 20, 2016 trended higher but then bearishly bottomed again July 7, 2017 (0.4989). Currently this AM the AUSP is 0.4737 - a new low and very bearish indication.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted.

Gold $1,277, Pops to $1,291 on Flynn; Tax Reform Passage Likely

Gold Country
Eureka, Nevada

Friday, December 01, 2017 AM

Morning Miners,

What a text book morning for gold!

For the most part, gold has been roughed up this week on improving expectations for passage of the U.S. Tax Reform bill in some form. As I explain in my input to the Kitco News Weekly Gold Survey (below), passage will be "net bearish for gold given the thesis that lower taxes will spur economic growth, strengthen the U.S. dollar and establish an environment for higher interest rates." When I wrote that opinion Comex gold traded at $1,277 per ounce, down 0.9% for the week. 

Then BAM! 

The newswires report that Michael Flynn pleads guilty to lying to the FBI. Comex gold pops to $1,291 as the U.S. political uncertainty pot gets a new stir:

Michael Flynn pleads guilty to lying to FBI in Mueller probe (NBC News, 12/01/2017)

In the early morning, gold behaved as a currency reacting to the forces of U.S dollar strength and interest rate expectations. With the Flynn headline, gold switches to safe haven mode. Currently Comex gold has retreated some from its high to trade at $1,287.2 (8:40 a.m. Eureka time). The two bookends of gold's 2017 story - the ebb and flow of currency-like behavior and "run-for-the-exits" price transients. 

I believe there will be some settling in the coming days and that Tax Reform will probably advance to reconciliation. Political and geo-political turmoil support gold; a shot-in-the arm to economic growth provides some headwinds in terms of U.S. dollar and interest rates.

So it goes for the Lustrous One.

For more about gold, please read my input below to the Kitco News Weekly Gold Survey.

Here's our scorecard on where we stand for the last-half of the year:

Intraday highs on the Comex futures exchange (all December contracts):

Gold $1,362.4 per ounce September 8, 2017

Silver $18.290 per ounce September 8, 2017

Copper $3.2595 per pound ($7,186 per tonne) October 16, 2017 

Comex copper is presently trading at a $3.0800 per pound, below October's high and 2.9% down for the week. Improving global growth has kept the red metal above the key $3 per pound level (it bears repeating that the OECD now predicts 45 economies will grow this year and the IMF has stepped up global 2018 GDP from 3.6% to 3.8%). All eyes are on China to see how growth prospects shape up now that their upbeat 5-yearly Congress has concluded.  Today's Caxin PMI was weaker-than-expected at 50.8 but still expansionary. Copper prices are less sensitive to supply side excess as LME inventories continue to decline:

It is instructive to keep our eyes on the Comex inventories which are on the rise and now exceed the LME (209,143 versus 191,725 tonnes)

And, again the chorus of our very tiresome molybdenum song,  "LME Moly Oxide remains on snooze alarm at $7.26 per pound. This is disappointingly short of $8 after climbing to $7.94 for much of May." 

General Moly (GMO) popped to $0.35 yesterday and is currently trading at $0.31 per share. The company received their AMER Tranche #2 funding on October 16. 

My Input to Kitco News 

Here's how I saw the weekly price action as told to the Kitco News Weekly Gold Survey:

My vote is up. Target gold price $1,270 per ounce. Target Silver price $16.2 per ounce.

Gold price is very sensitive to the fate of the U.S. Tax Reform bill as evidenced by a more than $30 per ounce swing this week that tracked up-and-down expectations for passage. Although the Senate vote has been delayed until possibly today, it will likely pass in some form; the same is true for the reconciliation phase. This will be net bearish for gold given the thesis that lower taxes will spur economic growth, strengthen the U.S. dollar and establish an environment for higher interest rates. 

This week's better-than-expected U.S. GDP print of 3.3% reinforced the notion of a strengthening economy. A key interest rate to watch is the 10-year Treasury yield: sustained rise above 2.4% is bearish.

The yellow metal has, however, gained more than 2% on falling copper with a slight loss to the broader Bloomberg Commodity Index (BCOM). Mixed results are also true relative to major currencies; gaining value on the yen but falling to against the euro.

Silver should follow gold lower next week to $16.2 per ounce.

Additional Note:

The fate of the Chinese yuan remains a key tell for gold and copper - a material drop in valuation could boost gold and depress copper prices. The yuan has stabilized below 7 USD/CNY for 2017 and generally grown stronger. The yuan is weaker than last week at 6.6103 USD/CNY and now 2.7% above its low (i.e. a stronger level) for the year of 6.4345. A 1-month yuan volatility of 0.21% is in the ballpark of major currency levels - a healthy sign for the Chinese currency (1-month volatilities of euro, yen and gold*).

Have a great weekend!

* the euro & yen 1-month volatilites are  0.97% & 0.85% respectively; Comex gold 1-month volatility is 0.66%.

Weekly Summary  for December 01, 2017 AM 

(click on table for larger size)

Gold Price Outlook: Fourth Quarter 2017 (Revised)

Gold started the year nicely and should remain in my latest revised range of $1,250 to $1,400 per ounce*. Average gold price for 2017 is expected to print above $1,250 per ounce with a chance to see $1,400 given an adverse outcome for President Trump's tax reform plan or political/geopolitical shocks (e.g., North Korea, Iran, Syria).

Gold has gained ground on the embattled euro and yen. Post-election, gold in euro and yen terms is up and safely above 2013 lows (chart below). It was worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen), and headed lower on the prospects of the ECB taking a more hawkish stance on monetary policy. It  had a nice rally following President Trump's "fire and fury" comments with an established a trend higher since early-July. The ECB's "lower for longer" approach to quantitative easing has returned some mojo to the gold-in-euro uptrend although that movement up has now faltered (see chart below).

Gold in yen has mostly trended higher since the U.S. election. The Bank of Japan announcement that their accommodative monetary policy is unchanged supports this uptrend.

An important gold ratio to watch is gold-to-S&P500 or AUSP (see "Chart to Watch" below).

Gold ratios relative to copper and oil at historically less extreme levels which proves a healthy sign. However, gold valuations relative to copper are again in decline posting a new low for the year of 401 pounds per ounce on October 18th and again on the 25th. Falling below 400 is bearish for gold.

Political and geopolitical events together with concerns about the timing and efficacy of the new administration's policies have restored glitter to gold in 2017. A fall below $1,260 is bearish; below $1,230, very bearish. A rise above $1,300 is bullish; above $1,362, very bullish.

(please do your own research, markets can turn on you faster than a feral cat!)

* My pre-election October range for gold price was $1,240 to $1,320 per ounce, Winter 2016 Edition of the Mining Quarterly:

 Storms Never Last: Positive News for Gold, Oil & Copper

My commentary in the Spring 2017 Mining Quarterly reaffirms an average price above $1,200 per ounce with a potential run at $1,400:

Commentary: Gold ain't just whistling Dixie; The U.S. dollar has peaked and commodities have bottomed – a bullish case for gold in 2017

Click on the image for a larger size:

Gold in euro & yen terms with good margin above 2013 lows

Note for currency buffs: Value parity in the above chart occurs when the EUR/JPY cross rate is 139.24; something to watch for - presently 132.69 yen per euro. 

Chart to Watch

Here's a chart to watch for 2017. Click on the image for a larger size:

Gold-to-S&P 500 Ratio

An important gold ratio is gold-to-S&P500 or AUSP. The ratio bottomed in early-December of 2015 and reversed to a bullish trend, peaking February 11, 2016. It bottomed again December 20, 2016 trended higher but then bearishly bottomed again July 7, 2017 (0.4989) and yesterday (0.4822). Currently this AM the AUSP is 0.4830...a modest uptick from this week's low but at now bearish levels (AUSP < 0.5).

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted.