Gary Tanashian | Aug 18, 2013 12:58AM ET
The destruction culminating in late June in the gold price brought out the usual suspects to school us ever since about why gold is all done as a worthy investment in an era of economic revival, compliments of heroic policy making by Ben Bernanke and Associates. Perceptions are now fully cemented toward policy maker control and a new global growth cycle.
These gold-negative voices included a pair of academics, the widely followed media star Nouriel Roubini and a lesser known writer named Robert Wagner, who has been riding the gold bear wave with a series of articles at Seeking Alpha, talking about how the main pillar supporting gold – the fear trade – is dead.
So we have a perma bear and new era bull coming at the barbarous, non-dividend paying relic from both sides! Excellent. Just as a tidal wave of knee jerking financial refugees piled into the ‘fear’ trade – as Wagner calls it – in 2011, the tide has spent two years slowly going out. But now the tide is starting to come in again on gold even as happy stock market and economic perceptions are being cemented; just as gold is doing this:
Gold fanned upward from the positive momentum divergence and has now broached an important resistance level. This as the stock market appears to be cracking, just as promoters there tout a new secular bull market for the public to suck on. Here’s the big picture chart from NFTRH 251.
Regardless, the right people are lining up on the wrong sides, just as changes are set to come about. This is signaled by the impulsive moves in the precious metals (led by silver) and Thursday it manifested in a break upward through resistance by the Gold-SPX ratio:
But the the precious metals have been led by the impulsive and excitable little brother, silver. Going forward the stodgy old man, gold, could play some catch up. But first, this chart of the Silver-Gold ratio shows a panic to get in that is not sustainable:
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