YeOldGoldNugget's Blog Spot: October 2009

Saturday, October 31, 2009

G for Gold and back with a Vengeance

By 79Atoms on Saturday, October 31, 2009

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

Lots and lots of comments on this chart today. BelieVe you me, I could haVe gone on and on with this chart. HoweVer, I got tired of doing so and I preferred the lazy way of adding an 'and on and on...' comment on the chart. I'm sure you get the picture, our Earth has many countries, take your pick and put it on the chart. Oh, and also, please don't feel left out if I'Ve not included your own countries debt on the chart. Trust me howeVer on this, those debts are there as the chart aboVe should haVe anywhere from 193 to 250 comments on it depending on who's doing the counting, country-wise that is.

I'Ve added my own trend lines on there, at least how I think they should be drawn. Well anyway, it paints a pretty clear picture between a downtrend and an uptrend wouldn't you say? On the chart you can clearly see that since late February 2008 gold began on its downward trending moVe. It broke out through the upper trend line in early July 2008 but the fundamentals were not there at that time for it to go higher and we fell down back into our trend pattern and from there on it went all the way down to the lower trend line.

Then September 2008 came, already known to be one of the better months for gold and like times before, gold made another break for it and made a massiVe rally and on that September the 17th, gold increased by oVer $100 in a single day of trading. All was looking well for gold until the crisis happened in October 2008. MassiVe panic across all the boards and heaVy selling ensued. Gold was also heaVy hit and fell in a matter of a few trading days from a high of about 927 to about 698.

But then NoVember came, remember remember the 5th of NoVember! In our case, remembering just the NoVember part of it would suffice. Time wise we are then at a moment were the crisis has just happened and countries are slowly beginning to reVeal their stimulus packages. To me that is indeed our V-moment in time.

Before I continue, take a moment to watch this small clip of what is in my opinion one of the greatest moVies eVer made, V for Vendetta.

In the moVie, the script goes like this.

V:People should not be afraid of their goVernments. GoVernments should be afraid of their people.

E:And you're going to make that happen by blowing up a building?

V: The building is a symbol. As is the act of destroying it. Alone a symbol is meaningless. But with enough people, blowing up a building can change the world.

Until only a little while ago most could only eVer dream of gold prices reaching this far and mind you, not only reaching, but holding. Beginning October 2008, V was finishing of his last final preparations for his big day. Last NoVember 2008, In the wake of the announcements of the stimulus packages by countries around the world the gold cap was finally blasted to obliVion. This was indeed through a single eVent, like blowing up parliament was in V for Vendetta, this also goes for the mental gold cap at 1000 and no more. That has now gone and changed to

a 1000 and oh my God...how much more?

Well, lots more, sure I can do a complete roundup of each and eVery country and how much they, through their actions, might haVe added to the price of gold but that would take me for ages and would result in guesstimates.

All in all, what this says and I will make it Very clear, before October 2008 bullion banks had a free to act, wild west attitude, thinking they could get away with eVerything in shorting gold and keeping it tightly beneath a 1000. It didn't really matter whether they could deliVer the gold they were short coVering or not, they just added to the shorts and scared the other side into taking losses.

Now howeVer, they stand to loose so much more when they get caught in the act, I'd say in the current climate going short as big bullion banks do, we are bound to see the emperor without clothes sooner rather than later. When we do, picture equals not Very pretty!

YeOldGoldNugget's links of interest

Friday, October 30, 2009

Gold and the Gold Bugs Index (HUI).

By 79Atoms on Friday, October 30, 2009

Gold Bugs Index (HUI)

Chart is courtesy of marketclub.
Marketclub - Gold Bugs Index (HUI) Trend Analysis.

Today we will be looking at the Gold Bugs Index, better known as the HUI Index. I assume most of my readers will know that there are two major gold indices, one of them is the HUI Index and the other is the Philadelphia Gold and Silver Sector Index or XAU Index. There are others of course but I will focus on these ones for now and in particular the HUI Index. The HUI Index is listed on the American Stock Exchange while the XAU Index is listed on the Philadelphia Stock Exchange. So, why two indexes? Well, the HUI Index is solely comprised of mining stocks that do not hedge their gold prices for more than a year-and-a-half into the future.

That is thus a very big difference and one which should be understood and remembered. Why? Well, because that makes a huge difference investment wise. If you think prices of gold are going to rise than I as an investor would rather be invested in the HUI Index than in the XAU Index. So, with a rise in gold prices you will see more gains on the HUI Index than on the XAU Index. Then again, you will also be hit harder when gold prices fall.

So, chart wise I'm sure most will have already looked at the trend lines I've placed upon the chart. Now, honestly, you tell me, ain't those two of the most beautiful trend lines you've ever seen?

Now, I will be the last person telling you that you should let a pair of simple trend lines guide you in your investment decisions! However, they are there! Aren't they? Right there on the chart, back from the lows of when the crisis was in full bloom until where we are now. Perfect trend line!

So, where does that leave us now? Well, I'd say at a critical juncture again. I'd say the fundamentals, real value wise, for the whole gold and silver market are far too great and far surpass every other sector out there, so based on that I can definitely understand why the HUI Index has held and traded around the 380 - 400 for the last three days.

I will make a wager that most every banker, analyst, chartist, broker, fund manager and practically all you can think that invest in gold are looking at those very same trend lines I've drawn. Only difference, all will draw their very own conclusions, some wrong, some right. Time will tell who got it right in the end.

So, I must conclude that yes indeed, those trend lines are just two plain lines on a chart, however, in this case they provide a very clear picture of where we are right now. I think most will agree if I call it standing at the bottom of our lower trend line. All agreed?

So, based on golds strong fundamentals as leading indicator for the HUI Index, the fact that we are at the low of our trend line, the fact that Stochastics is already in the overbought zone and turning back up, the fact that we have traded for 3 days with the same range of prices and not breaking down the trend line makes we wonder if this is not a bottom in the making?

Bad would be the downward trending MACD I'm looking at which is looking to go below zero which indicates a confirmed downtrend is in the works. But luckily, the MACD might very well turn back up from here. Worst case, the HUI Index will look up the 200 Moving Average at around 350 and will find support there.

Well, if we do turn up from here which I think we will, then we are looking at a long term target of around 480 and if it breaks the upper trend line then I'm even more bullish.

YeOldGoldNugget's links of interest

Poll - Which are your favorite junior stocks?

By 79Atoms on Friday, October 30, 2009

Yesterday I've added a new poll to my blog. On it I ask you to vote on your favorite junior stocks. I've already added some at random and others because they are also my favorite juniors. However, with this poll you can also enter your own favorites. These can be either gold or silver stocks and they can either be exploring, developing or producing.

So, when I check my 'other votes' and see that mine x which is not included on the published list, has gotten more votes then I will add that option to the list so readers can vote for it. That way at the end of the poll I can see which ones get the most votes and thus are most popular amongst the community.

So again, don't feel limited by the listed options as I also do look at what gets sent in from the other stocks. The PollDaddy poll also allows you to make comments. If you click on 'view results' there is a link to the comments screen.

The results from the other poll are posted here for reference as I will now be removing the old poll from my Blog.

Thursday, October 29, 2009

BullionVault - Buying Gold online

By 79Atoms on Thursday, October 29, 2009

Gold Bar - Copyright CreativeCommons.org

It used to be very difficult for private individuals to find a simple, safe and cost-effective way of buying, storing, and then selling gold.

The main problem was the sheer size of the investment you needed to make to access the best prices - and there were extra complications with integrity and storage too.

Direct access to the very best prices

BullionVault.com changes all this. It enables people from all over the world to own professional market gold and keep it in any quantity in officially recognized bullion vaults in London (UK), New York (USA), or Zurich (Switzerland).
All BullionVault gold is held in Good Delivery form. So when you come to sell, your buyer is able to trust the purity and weight of your gold, which is guaranteed by BullionVault itself because we know that you never had the chance to corrupt it.
So the dealing spread is typically 0.4%, about one-tenth of the equivalent cost charged to private customers for gold coins and small bars.
You can buy just a small portion of a 400-ounce bar. You can trade on-line in increments as small as 1 gram - currently about $30.
BullionVault is not a unit trust / mutual. There is no 5% front end subscription load. When buying gold you pay a commission whose maximum rate is 0.8%, falling progressively when you invest above $30,000 to the spectacularly low rate of 0.02%.
Storage charges are down to wholesale rates of 0.12% pa ($4 per month minimum) with insurance included. That's less than a tenth of the storage fees charged by retail banks, and less than one-third the annual fees charged by typical exchange-traded gold funds (ETFs).
BullionVault customers also save money because they deal directly with each other, willing seller to willing buyer, by using our order board.
You make a further big saving at settlement time too. You don't have to arrange for expensive armoured courier bullion collections.

BullionVault Registration

To register go to the main page of BullionVault. On it you have to enter your own user name. I will use a fictional user name to go through these steps.

BullionVault Registration Form

As you can see, I've entered my details, the user name I want to use, my own email address and a decent password. Next you have type over the three random numbers or letters that are generated. That is done to make sure it is a real person doing the registration and not a computer program. Last, you need to agree with the terms and conditions and you can submit the form.

Registration Completed

After clicking submit you will be brought to this screen confirming you your account was successfully created. Congratulations! You have made your first steps to becoming an actual gold trader. Now click on login to enter your details.

BullionVault Login

Fill in your user name and password.

BullionVault Account Balance

After securely logging in to BullionVault you will be taken to the Account Balance screen from which you can see you current balance in the currency in which you made the deposit of course. From this screen you can pretty much do everything from watching the prices, charts, buy gold, sell gold, deposit funds and basically everything one needs to trade gold.

BullionVault Markets

Clicking on the markets button brings you on the screen where you buy or sell gold. It shows the best bids and the best offers. Trading gold was never this easy. Those interested in doing a bit of trading and not knowing how then I suggest checking out BullionVault. They also have a pretty detailed help page and a help demo which guides you through everything.

Orko Silver Chart October 29, 2009

By 79Atoms on Thursday, October 29, 2009

Orko Silver Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

A lot of highlights on my chart as you will notice. I will try to explain cause there is an order in them. They start at the left following each candle and explanation. Here it goes, for those who remember my October the 5th article I did in which I made it quite clear as to where I thought we stood and what one should do at that moment. Well, that October the 5th was actually the start of the rally in gold reaching 1070.

It was thus also the start of the rally for Orko Silver and at that very point in time is where my 0.0% Fibonacci line begins. Exactly at the low of that very day which was about 0.816. The rally lasted until October 14, you can spot it on the last chart as it was the first red candle (hammer) after a long series of blue (green) candles.

That gave us the high of the rally and with that our 100.0% Fibonacci line. In our case this is 1.041. Those are the numbers, the rest falls into place as retracement levels. One normally draws a Fibonacci chart like in this case, after an uptrend has occurred and one needs to find out if a pullback occurs, at which levels there could be support.

You can see from the chart that after the rally the pullback was until the 50.0% Fibonacci line and that level held for 4 days when on day 5 we got the false breakout to the 61.8% retracement level. A sucker's rally is what it turned out to be, looking at in hindsight.

Pan American Silver Bar - 2009 Copyright Northwest Territorial Mint

After the false breakout, what actually was the breakdown in gold and silver we got our downward march. Luckily for us, the shakeout in gold came to a standstill and on our chart that perfectly coincides with the 23.6% Fibonacci level.
And as of this moment we are already heading back up.

So chart wise I'd like to see another up day tomorrow and a close above 0.95 which is a clear break of the 61.8% Fibonacci level but also puts us above the 10 MA line.
If that happens, all lights are green for the Orko Silver speed train to blast through 1.00 and beyond.

The momentum is definitely there, we had some decent volume being traded which was around 370K. Chart looks good again. Gold and silver look good to go again, the headlines making the news on Wall street were Stocks Rally Sharply On 3Q Gross Domestic Product.

Allow me to translate that one for my readers, I do provide media translation assistance, for a minor fee I will even come to your home and will translate directly all the news stories you are watching on your television station.

So, when it reads, Stocks Rally Sharply On 3Q Gross Domestic Product, that means,...

Pack your bags cause we are heading south again in Dollar-ville

So, on with Orko I have some latest news, some will already be aware of this but I wanted to make contact with management and have it verified before I posted it online.

In discussion with IR :

within 2 to 3 weeks we should get a couple of news releases regarding infill drilling, metallurgical testing and probably exploration drilling, starting next week with news on the infill drilling
Ben and Gary in Mexico, returning end of next week
George and Mike on their way back from South-Africa , returning early next week
PAAS investing in infrastructure, roads, offices, power generator ,... at La Preciosa

There was also mention of results coming in the coming days or beginning of November. The time frame could very well be true but the nature of how good the results would be are however not verified. It is my belief that they will be good but that is just my opinion, I also heard from another contact that the metallurgical recovery rate could go up but again that is unconfirmed. We will have to wait and see what the news release will bring.

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

Chart is courtesy of Kitco.com

You can clearly see that yesterday, Wednesday October 28 at around 16:00 we made what looks like our first bottom at around 1026. From there on some slow but steady progress, until next morning that is because after only 25 minutes into opening at the New York Nymex there were some strong buyers lifting the price from 1032 to over 1037 and a little while later we were already trading at 1046.

Johnson Matthey 1 Kilo Gold Bars - Image ©2005-2009 Northwest Territorial Mint

You can see from Kitco's 3 day comparison chart and my chart that indeed getting over 1042 was needed to give this rally any sort of significance. Now that we have indeed broke our 3-day low, this now adds to the strength of our rally. It could have been different. Gold could have rallied to 1042 and we could have seen doubt or fear again. We didn't! Gold kept going and beat its 3-day low and is now looking to head back up the 10 MA line. That's not the line on the chart I've posted, it can only be seen on the daily chart.

That means that gold should head back up to 1055 and beyond. To keep it simple, on the daily chart all things that need to point up are pointing up so therefore I am looking first at getting to 1055. If that not only holds but has no problem going higher than it would be fair to assume that getting to AND over 1070 will not be all that far of a stretch.

Gold Spot Daily Chart Update

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

I've now posted the daily chart to put things into perspective. From today's action you can see we seem to have bounced back up from the 50.0% retracement level. The 0.0% Fibonacci I use here coincides with the low we made late September before we rallied to 1070 (100%). Getting to and above 1050 would bring us back above the 10 MA line.

You can see that were we are at right now 1046, that this is above the 61.8%. Only thing that remains is the last little hurdle before we hit 1070 again.

YeOldGoldNugget's links of interest

Wednesday, October 28, 2009

American Buffalo Gold Coins

By 79Atoms on Wednesday, October 28, 2009

They're back! The U.S. Mint will begin supplying gold Buffaloes after October 25th.

To meet the demand of investors who seek the purest investment gold possible, the US Mint supplies a 1-ounce .9999 fine (24 Karat) legal tender $50 gold bullion coin based on the classic 1913 'buffalo nickel' designed by the world famous sculptor James Earle Fraser. You can view the design for the coin’s obverse and reverse below at left. The obverse features the classic profile of a Native American. The reverse features a majestic buffalo.

The Design
The 1913-1938 Indian Head nickel, with the buffalo reverse, is an essential bit of American nostalgia and history. Designed by the American master sculptor James Earle Fraser, it is just one of many enduring images he created. So popular is the Fraser “Indian Head” nickel that, prior to its selection as the U.S. Mint’s purest gold bullion coin, it was released by the U.S. Mint as a $1 uncirculated and proof silver coin in 2001.

Three men — Chief Iron Tail, Chief Big Tree and Chief Two Moons — sat for Fraser as he designed the coin. The buffalo used by Fraser was a denizen of New York City’s Central Park Zoo.

YeOldGoldNugget's links of interest

Orko Silver Chart October 28, 2009

By 79Atoms on Wednesday, October 28, 2009

Orko Silver Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

A quick update after a couple hours into trading. The downward force on the commodities markets is getting too strong for Orko Silver to bear. The 0.90 support has broken and we are looking for support of the 50 MA line around 0.85. If that doesn't hold this stock will go down to around 0.81 before we will see selling pressure decline and buying increase.

Like I said yesterday, we will see 1020 in gold and 16.00 in silver before we will see renewed interest.

Orko Silver Daily Chart Update

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

My earlier chart has an error on it. The Fibonacci Retracement lines should be drawn like on the updated chart. The 0.90 was a support but in my updated chart this coincides with the 38.2% Retracement level. The top should coincide with the 100% level and the bottom and thus, the start of the uptrend, should coincide with the 0% Fibonacci Retracement level. We are now retracing from an earlier uptrend.

2009 Copyright Northwest Territorial Mint - 100oz Bar

As you can see from the chart we are now hovering at 0.87 which coincides with the 23.6% Retracement level. Normally, when a stock has had an uptrend and we get a pullback, traders look at a bounce back up from either the 61.8% or 50% level. Now, since we have already broken through those levels it is unlikely the 23.6% Retracement level will act as a support. Only thing that will add a bit of support around the level where we are now is the 50 MA line which coincides with somewhere around 0.85.

If tomorrow the 16.00 for silver holds then Orko Silver will hold around 0.85 and 0.87, if it not only holds but we get a bounce up for silver then most everyone will decide the bottom has been set and will start buying again and we might get a close in the green. That would be the optimistic picture which I'm holding on to for now.

Google Finance Sector Summary Chart

Chart is courtesy of Google Finance

Some heavy losses across the board and the commodities markets are bearing the brunt of taking the biggest losses inflicted today.

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

As you can see from the gold chart I posted. There is the potential for an even bigger drop, that is if the 1017 or 1020 supports don't hold. Just as you know, it is not out of the ordinary for gold to make such a correction before heading further up. The RSI and stochastics are indicating we are at or very near oversold levels so a possible reversal could be soon knocking at the door.

Just pray or whatever one does, rub your gold coin, that the 1017 and 1020 hold cause if they don't better make sure to get some money on the sides cause it will be bargain shopping time again across the junior markets. For the day-traders, get out there where you have enough profits and get in where prices are cheap and fundamentals are strong.

Don't take losses easily, do so only after the fundamentals of the company you are invested in have changed for the worse.

YeOldGoldNugget's links of interest

Tuesday, October 27, 2009

Orko Silver Chart October 27, 2009

By 79Atoms on Tuesday, October 27, 2009

Orko Silver Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

We basically have the same situation we had yesterday. Orko Silver opened lower at 0.92. There was some heavy selling going on in the morning hours with prices ranging between 0.91 and 0.92. I counted about 120K being sold. That went on until a little before eleven cause that is when the first buying of the day started. A couple of bids and blocks around 0.92, 0.93 and 0.94 by TD Securities.

Right after that UBS Securities Canada Inc. turned up as a seller bringing the price down to about 0.91, that was around noon. However the afternoon was a whole different ballgame! Buying started around one pm and moved the price to 0.92. A couple solid blocks of 10K, 7.5K and a couple more brought us into a close of 0.940 0.000 (0.00%). The entire afternoon saw no more sellers.

So again a pretty good day for Orko Silver all considering. Very very good day, again confirming Orko Silvers share price suffers less of a bumpier ride during this current correction. Again, the more we hold around these levels the bigger a potential leg up will be. I call that the slingshot effect. This happens when during a correction, a stock has already built enough fundamentals and seen plenty of buying to hold between a certain range.

When this correction in gold and silver is over and everyone who had to cover has covered then not only will buying start again, mostly everyone else who sees the chart of Orko Silver will see the trading range and will try to get in before we head to even higher prices. Like a steam train this is, slow starter but once she gets going you try to stop a 150 ton pile of moving silver!

After this correction in gold and silver is over we will be in my opinion definitely be ready for the next leg up and getting us above and beyond 1.00. That correction might be over this week or early November, depending on when the dollar gives up after its last final rally before heading down and in the direction of the first real stop...the 72.00.

That is when gold will shine again. I'll you this, gold will in my opinion first see 1020 before it sees 1100. That goes the same for silver which could see a bigger down move percentage wise than gold as with silver it may very be more violent than with gold.

When I look at the daily chart of silver the short term picture indeed does not look very bright. However looking at a weekly chart of silver the story changes completely. I will post the charts with a couple comments but I will first let the chart do the talking on this one.

Silver Spot Weekly Chart

Chart is courtesy of marketclub.
Marketclub - Silver Spot Trend Analysis.

That crossover you see there of the 50 MA and the 200 MA is not just a crossover, in TA that has a name. It is called a golden crossover. Now, doesn't that sound nice? Now, looking at the naming, would you say that is bullish or bearish crossover then?

Now, if it were called a zinc crossover then I would know the answer...so yeah, that is definitely a bullish sign. It happens when the 50 MA line crosses above the 200 MA line.

So, that does bode well going into November. I don't know when short term we will get a bottom in silver. This could turn up tomorrow or it could go and look up 16.00 again which was the high of June.

Silver Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Silver Spot Trend Analysis.

As long as our White Knights keep silver above 16.00 then the trend will remain upwards. I don't really think silver needs that big of a correction before heading further up. Let us wait and see what happens, there still is a downward force working which like I said earlier could take us into November. By then all the apples have been shaken from the tree and we can begin our next cycle again.

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