I have found a gold forecaster with a 100% accuracy rate. Below is a chart of two of his recent predictions.
The first arrow marks the 15th of January when he said to "use narratives, not just charts, to tell if gold's bottom may be near", noting that mainstream commentary was a "precursor to more bullish narratives. It also gives confidence to smart money to start to get into the market"
The second arrow marks the 15th of March when he said that he "would not be surprised to see it correct down" and that "there will be corrections on the climb back up" during the rest of 2014.
Of course the forecaster is me, and the 100% accuracy rate is misleading as I've only made these two calls in the entire time I've blogged (here and here), but hey, since when does the full truth matter in click baiting headlines?
Now given that my sample size is only two forecasts, you can probably bet against my next call as there is no way I can maintain a 100% accuracy rate. I'm not ready to make a call for a bottom in this correction so at this time will just expand on the March 15 comments I made in an interview with Al Korelin.
In that interview I noted negative premiums on the SGE were possibly indicative of bullion banks having overestimated Chinese New Year demand (BBs stockpile ahead of these high demand periods, see here for some evidence of this). Perth Mint has seen some on and off weakness in kilobar premiums recently and this was confirmed by Ed Steer noting that JP Morgan received exactly 160,750.000oz of eligible gold into their Comex warehouse on March 20. This is exactly 5 tonnes, which readers of this blog know is indicative of kilobars. If the Chinese are so hot for gold right now, why is JPM putting kilobars into a NY warehouse?
For a current read on the market I think you have to take a narrative approach I discussed in that January 15 article - and that is mainstream financial markets narratives, not goldbug narratives, as that is where the big money is. Where is that narrative now? First this Business Insider article quoting Goldman:
"we see potential for a meaningful decline in gold prices towards the level implied by 10-year TIPS yields, which our rates strategists expect to rise further this year, and reiterate our year-end $US1,050/toz gold price forecast. More broadly, we believe that with tapering of the Fed’s QE, US economic releases are back to being a key driving force behind gold prices"
And this from the Australian Financial Review via Macro Business, quoting some nobody and SocGen:
"Gold is going to be somewhat problematic from an investment standpoint over the next six to 12 months. We’re probably looking to a relatively higher and quicker increase on rates, which is a headwind for precious metals."
"We continue to believe that the economic momentum in the US shows further improvement, we reiterate our very bearish outlook for this year. Prices could drop below $US1,000. I would not rule that out."
The important thing is these people believe this stuff, that the US is "improving" and they will trade gold accordingly. I think it is also worth noting Dan Norcini's repeated comments that this price run up was more about short covering than new longs, and he is representative of the Comex floor "narrative".
I also note the Zero Hedge article on China Commodity Funding Deals regarding gold, which has some potential to be negative for gold, despite what some may say. Most likely their "don't worry, it is bullish for gold" interpretation comes from a lack of understanding of the deals as they probably haven't got access to the professional market commentary on that topic. That is for another post, but I will note I brought this issue to your attention in September 2012 and ZH and others who are now jumping on it could have found out a lot earlier from these articles (good background reading if you're keen) June 2013, August 2013, September 2013, December 2013 and finally from Koos Jansen, who you'd think gold bloggers would read, with this quote indicating the risk: "some enterprises in China use gold leasing from banks to solve their short-term funding problems in the hope of buying back the gold at lower levels to repay the lease. However they can be short-squeezed when gold moves higher"
So at this stage I think the risk is to the downside but will hold off on a bottom call until I can see some shift in the mainstream narrative.
You may well be right. A major deflationary shock is coming, mostly from China. It will show in all asset prices. The inflation and higher gold prices follow next year as the central banks keep the banking sector alive with fresh money printing of biblical proportions.ReplyDelete
Annon--You're not allowed to site "fundamental influences" in this blog. Only dumb nonsense like "narratives" are acceptable.ReplyDelete
BRONISM: "..."use narratives, not just charts, to tell if gold's bottom may be near"..."
FWIW, I still can't figure out what kind of influence a "narrative" has on gold or silver, but Bron's got it down pat. LOL!
When you say, "...deflationary shock..."--It's Fundamental
"...inflation..." --It's Fundamental
"... fresh money printing..."--It's Fundamental.
Getting back to this useless post, Is Bron now posting the same kind of "hypester/predictor" BS that Silverdoctors, TFMETALS, SGT, KWN, Dan Norcini, James Turk, Mike Baloney, David Morgan , Jim Willie, and Jim Sinclair resort to?
Maybe, but predictions?--Who cares?
Let's say Bron is right, Did he trade it? NO
Can this nonsense be used to trade with? NO
Can anyone PREDICT the future with accuracy or is it all just lucky BS?
I'll answer that: You see, the universe is expanding. The future is in a place where the universe hasn't yet expanded to. We don't know what it looks like in the future, because it hasn't been invented yet.
Some scientists believe there are 9 dimensions inside and out side of our "universe". Some of these "existences" are what COULD happen.
Dimension 5 is such a place (an existence) where all possible outcomes COULD take place where an infinite number of "universes" COULD exist.
However, we can't know what these look like because they always lie in the "COULD BE" existence.
There is a sixth dimension that, according to what I've read and or watched as a presentation, contains all IMPROBABLE or IMPOSSIBLE existences that could or couldn't "exist". Each must be supported by a time vector.
Each must also be contained in an "existence" where ALL Probable and IMPROBABLE existences "exist" supported with yet another time vector, This adds up to a total of NINE DIMENSIONS--I GUESS.(Actually 10 if you want to be technical)
THIS WILL BLOW YOUR MIND: TEN DIMENSIONS: http://www.youtube.com/watch?v=p4Gotl9vRGs
Therefore, predicting the future is for idiots. I don't care if you get it right ten times in a row. It's still just dumb luck.
"Dumb Luck" is frequently confused with "The ability to predict stuff". One simple analogy can explain it: Let's look at the randomness of Pi.
There are instances where 9999999 or 5555555 occur. Could someone who said he could predict the next number in the Pi sequence saying it was 5 after seeing only 2 5's, call himself a genius if he happened to be predicting when this 555555 sequence occurred?--NO---it was just dumb luck.
And Now---MY CONCLUSION: This is why "bloggers" who call themselves "traders" are really "liars".
Bring back the songs, read the first couple of paragraphs and then it all went fuzzy. Agree there are evident narratve messages always have been.ReplyDelete
In a nutshell, Buy Gold place in vaults. Issue / Redeem X shares to APs only. APs sell shares to 1% and 99%, only 1% can afford block size to redeem. 99% never will be able to. APs to 99% all hedged through dominos.
"We must all hear the universal call to like your neighbor just like you like to be liked yourself." --George W. Bush, as quoted in the Financial Times, Jan. 14, 2000
Jake, you need to lighten up, I thought it was pretty obvious my forecasting claims were dumb luck and I was making fun of it.ReplyDelete
You also haven't read the Ben Hunt material on narratives, which are very relevant to gold given the great majority of its demand is investment, which is all about sentiment - gold has limited industrial/western jewellery use thus "fundamentals" are not the main price driver. Thinking investment demand is a fundamental is looking at the leaves falling from the tree, you aren't going deep enough into the why behind the buying, not the who is buying.
BRON---Here's a sample quote from Hunt From that BS Paper on Epsilon Theory 12-2013: "In 1895 there was a stand-alone Narrative for gold which was that Gold was money. Everything elseReplyDelete
was credit." <---Yes, gold was and IS money, PERIOD.
"But nowadays, there is no stand-alone Narrative on gold.
<---What's this guy talking about?---what "stand-alone narrative?---Gold is money, you save money and currency is paper---you spend paper and it is a debt instrument.---what more is needed?
"Today gold is understood from a Common
Knowledge perspective as a shadow, or reflection of a different stand-alone Narrative, that of Central
Banker Omnipotence."<---That's just part of it---Yes gold is manipulated, but who cares?---I couldn't care less and no one else who holds physical gold should care less about manipulation of paper---let the banksters take paper pricing to zero and be done with it so we can get back to physical gold value discovery...but even waiting for that is really unimportant as physical gold holds purchasing power and nothing else.
"Between 2003 and 2013 gold meant lack of confidence in money."<---WHAT?---paper is CURRENCY---GOLD IS MONEY. PERIOD---what's this guy talking about. NO PAPER EVER WAS OR WILL BE MONEY.
"The gold price was not an expression of a commonly shared belief in some inherent value of gold.<---This only applies to PAPER GOLD---WHO cares!---Gold has an intrinsic value against paper as paper loses purchasing power because CB's print it until it collapses.
"Instead, it was a statement of belief that global economic events could spiral out of the control of central bankers."<---NOT "COULD" WILL OR SHALL SPIRAL OUT OF CONTROL"---THERE IS NO "COULD"---It's always inevitable.
"It was insurance against a huge monetary policy mistake which could not be fixed such as hyperinflation or the collapse of the Euro."<---Yes, Gold is an insurance policy as long as the holder is holding physical gold, not paper anything. So what?---any idiot knows this.
Jake...great wandering rant!!!ReplyDelete
Try some decaf ;-)
I'm pretty sure you could substitute the word "narrative" for "sentiment".
I think we're headed for a deflationary scenario once the full scope and impact of China's correction is realized.
Gold falls to sub-$1100 at some point in a final shakeout of fatigued goldbugs who are nauseated by the thought of $1000 gold in a 3+ year bearish stretch for the metals.
Global tensions recently might be enough to keep gold bouyant but China experiencing a hard landing is an unknown factor at this point.
"As this Narrative took hold, the price of gold rose." <---What? There is no "Price of gold" Gold's value increases over time against paper currency as the purchasing power of paper currency drops as more of it is printed PERIOD. Fluctuations are a result of temporary Govt intervention. And what does he mean by "As the narrative took hold"?---The "NARRATIVE" that physical gold insures against a loss of purchasing power or the idiocy of govt borrowing has always been there and still is---any idiot knows this too. He just wants to be a pointy-headed professor who sounds like he knows what he's talking about.
"Central bank policies WILL determine market outcomes."<---yes, when referring to paper, because they can print unlimited paper to manipulate the short-term paper price---who cares again?---Let them manipulate forever until the paper price drops to zero!
"There are no longer any issues impacting
markets which cannot be addressed by central banks.<---what is he talking about again?---CENTRAL BANKS DO NOTHING EXCEPT PRINT PAPER THAT'S IT, PERIOD. While they can "talk down" the price they can only Print Paper as an action to artificially and temporarily influence the price of paper instruments.
"Central banks are the ultimate backstop for
market stability and the intermediate arbiters of market outcomes." BS---they can't do anything once faith in paper is lost and you know that---Any idiot knows this.
"Whether the market goes up or down depends on whether central bank policy is positive or negative for markets ie whatever the market outcome, it was driven by central bank policies."---when paper is concerned YES...but again, WHO CARES---own physical gold and it'll do what it has done for 5000 years---hold purchasing power.
”As this new Narrative took hold, the price of gold fell. The demand for insurance against out of control
central bankers dropped."<---Well, maybe the paper price of gold dropped and idiots who play paper gold sold their paper shares...who cares?
"It was the Common Knowledge regarding
first the inability and then the ability of central banks to control economic outcomes that made the
price of gold go up and down."<---BS! paper gold goes up or down based on manipulation PERIOD all the time PERIOD. When this stops, then True Discovery of the value of gold will come back---that is ---Physical gold will then be valued at higher amounts of paper than it is today because paper currency is a debt instrument.
All I can suggest is read something like http://en.wikipedia.org/wiki/The_Social_Construction_of_Reality - if the majority of people don't think about gold like you do, then its price won't behave like you think it will. Not much more I can say on this topic.ReplyDelete
LINK to The About Hunt Quoted Epsilon BS Paper: http://www.hlinv.net/?p=1394ReplyDelete
"The Narrative of Central Banker Omnipotence has nothing to do with whether people personally
actually believe that central bank policy is wise or foolish, good or bad. The only thing that matters is
whether everyone else believes that everyone believes the above script."<---BS---In a manipulated corrupted-banster-controlled paper priced gold market---the "people" down influence ANYTHING. They are slaves to the manipulation of paper gold PERIOD. They do not have enough paper currency to overcome their bankster manipulations and interventions.
"How do we know when everyone knows? "At this point, whether or not they agree personally, every investor will be forced to
update his or her estimation of what every other investor estimates the market will do. And the best
investors (and traders) are the ones who can guess better than the crowd how the crowd will behave."<--- This is the way paper markets used to be---driven by INVESTOR SENTIMENT" ---Today, There IS NOTHING EXCEPT INTERVENTION AND MANIPULATION OF ALL MARKETS---BECAUSE REGULATORS ARE IN THE POCKETS OF THE BANKSTERS---IT"S ALL CORRUPT.
"The reason why investing is particularly difficult now is that more or less the only Narrative out there
globally is the one relating to Central Bank Omnipotence which has been featured prominently in this
report. It means that the utterances of Bernanke (now Yellen) in first place and Mario Draghi in a
distant second place are more or less the only drivers of asset prices." <---YES---There is no way to trade these markets using anything traditional anymore. ALL MARKETS ARE MANIPULATED. THERE IS NO INVESTOR SENTIMENT---It's all hogwash!
"But as Ben Hunt says, the
levels of Common Knowledge regarding future Central Bank policy decisions are actually very low, the Narratives on both sides of the collective decision to buy and sell the market are extremely weak." <---BS---The CB's ARE The Strongest Hand And They Are THE ONLY Thing Keeping These Paper, (Stock Markets), Afloat. Through MANIPULATION.
What does everyone know that everyone knows will be Central Bank policy in the future? Very little.
And this impacts all markets – equities, bonds, gold and currencies. BS---They control it. Until the paper collapses, they control it. YOU CAN NOT TRADE MANIPULATED MARKETS.
Congratulations on your stellar record.ReplyDelete
I found this interesting:
The futures market can absorb buying more than the physical market can absorb selling.
Do you agree?
Debateable re gold, I think those comments by GS were more in relation to copper. Thanks for pointing out that statement, will include that in my post on this issue.ReplyDelete
i have said to many people that understanding mass psychology will make you a better trader (in todays world) than by understanding the fundamentals. Money flows are so big and so fast, and as Bron mentions, they happen because of what people are thinking and feeling and therefore betting on.ReplyDelete
Sure some of that is based on s&d, others on charts, but in a mkt like gold, so much is sentiment.
Another way of saying it, watch what people are doing, not what they are saying.
Okay Bron---I'll agree with this: "...if the majority of people don't think about gold like you do, then its price won't behave like you think it will."ReplyDelete
This is because I don't trade or try to trade these manipulated markets, so we're talking apples (my gold mindset) vs. your oranges (paper trading concepts).
But no one has read any of my many separate comments on each sentence of the quotes you suggest I read. Come on!---This guy has no concept of what physical gold really is.
In fact---let's talk about your statement: "if the majority of people don't think about gold like you do, then its price won't behave like you think it will."<---First, you again are accepting that "people" or the "sentiment" or "the narrative" drives the "price", (notice the quotes around prie of gold).---This is factually wrong. Manipulation drives the paper price, which has no meaning to the physical gold stacker with the correct mindset.ReplyDelete
Additionally, gold has no "price" It is VALUED by ever more paper notes over the long term accompanied by short-term paper price fluctuations brought on by central banks.
I suppose, one could divide the "sentiment" for gold into long and short term time frames and conclude that "in the short term, banks drive the paper price through manipulation". Over the longer term, sentiment drives paper prices--but again, this paper is meaningless in the long term and must eventually go to zero anyway.
This leaves the holders of physical who will spend their gold as needed, to exchange it for goods and services. These exchanges will be in te form of holding the exchanged currency for as short a time as possible before purchasing those goods as this currency loses it's purchasing power until the holder dumps it.
Bron, we saw some trading violate the long term downtrend, and now we've seemed to have resumed the trend. China is concerning, copper example more so. Put on top of that all the financing deals put together with imports of commodities..ReplyDelete
What is your take on production costs? Curious on an average, but more so on lowest cost production and how much is produced at those costs? If demand drops, so should production, and an efficient market will price down to the low cost producers. Some are calling for much lower prices, yet the common rhetoric is production costs are near current prices. Would love your thoughts.
I rely on analyst estimates of the cost curve, which only really bites into significant production volumes below $1000 from what I can see.ReplyDelete
I would be surprised to see that tested as with the $250 bottom, smart money pre-empted the supply restriction that would have occured if it got to $200, where I think most of the miner were then. I would think the same dynamic would be in play again.
FYI http://www.bullionbaron.com/2013/04/gold-correction-1970s-vs-today-miners.html has some commentary on Australian costs.
Several of those Aussie listed miners have disposed of the properties mentioned in that bullion baron article....whilst others have been put into care & maintenence now.ReplyDelete
Many of the costs quoted there are no longer accurate either.
H'mmm....but I thought gold was about to sky-rocket due to it's scarcity?!?!
Why would Sprott sell (or shill) gold last year and this year if the Comex or LBMA was about to collapse???
SRC=Sprott Resource Corp.
"During 2013, SRC sold 73,971 ounces of its gold bullion for approximately $100.6 million dollars at an average price $1,359 per ounce. "
Actions speak louder then words. Some of the gold/silver-bug shills out there are saying one thing but in reality they might be trying to pump up the price up so they can sell into it and get the hell out because most if them (and most of us probably) clearly missed out selling at the top 3 YEARS AGO.
KWN is clearly a pumper site who NEVER talks about selling metals or declining prices but instead tries to suck in wide eyed newbies while also feeding the gold/silverbug doomer types enough apocalyptic hyperbole to keep them brainwashed and satisfied.
if Bron would have said "gold to da moon" you probably would not have written the stuff you did, but instead "Bron is my guru".
Says basically a lot about irrationallity and bias in the gold sector.
Personally I prefer reading negative sentiments and reasonings, much more help with reality :)
BTW: My wife received this morning a spam email on her companies smart phone (they do have normally good spam filters with far above 99% detection rate).
They didnt want to sell or fish, the email was just something like "Goldman says Gold will drop huge, be aware".
I am not sure what that means, but I was really amazed.
Bron, been meaning to ask you: WRT your series on gold industry and effects of EFT on the market, did you cover if it is known exactly what percentage of "paper" gold sales is referencing an actual ounce? I'm not sure if this is called Rehypothecation or if I have that mixed up. None the less discussions of the paper market and how much is in (say) COMEX holdings VS whats out in the market?ReplyDelete
Pardon me if this has been done already, if so I'd be happy if you just post a link.
Thanks heaps, and as always love reading your posts.
"Now given that my sample size is only two forecasts, you can probably bet against my next call as there is no way I can maintain a 100% accuracy rate.
Assuming that you were throwing a coin for your predictions, your next prediction again has a 50/50 chance of success.
As a well connected professional, your predictions have a better than 50/50 probability.
Scenario 1 gives equal money. Scenario 2 has a positive expectation.
Therefore betting against you would be a mistake ;)
It is very hard to get a handle on that issue, it depends on turnover and the mix of people trading (speculators vs real users) and it therefore changes over time. Some thoughts:
"When all is but dream, reasoning and arguments are of no use, truth and knowledge nothing." - John LockeReplyDelete
THIS MESSAGE IS FOR THAT DIMWIT HARVEY ORGAN WHO CAN'T WRITE A GRAMMATICALLY-CORRECT SENTENCE TO SAVE HIS LIFE:ReplyDelete
I can't post a comment to his blog because he uses some nonsense Disqus crap requiring log-ins. He also knows that I think he's an idiot.
He's currently complaining about not being able to get current GOFO rates. Yes, it's true, they don't want anyone now (unless you're a member, maybe), to have access to today's GOFO rates today.
However, you as a normal debt slave, can obtain two-day old rates for free here: http://www.quandl.com/OFDP/GOLD_3-LBMA-Gold-Forward-Offered-Rates-GOFO
This is the only website I've been able to find that lists ANY GOFO rates. The LBMA has removed their GOFO update website. Is anyone surprised?---NOT ME---This is just normal bankster-scamming--move along!
They are two business days late, but they are at least data that can be downloaded.
Seems LBMA has had a site redesign, the GOFO data is now in a table at http://www.lbma.org.uk/pricing-and-statisticsReplyDelete
GATA made exactly the same mistake as Harvey about 2-3 years ago when the data was moved last time.
I remember Lance Lewis sorting it out then, as you have done this time, thanks Bron.
Mayve I am getting senile, but when I go to the LMBA site your URL leads to, I cannot manage to bring up the GOFO data.
Bron doesn't know---He's too busy with his BS predictions and Shilling For The Non-Believers of Market Manipulation.---Just go to the "TABLE" Tab above the Chart at the bottom of the page here: http://www.lbma.org.uk/pricing-and-statisticsReplyDelete
and click on it---it'll pop up a table---Then go to the arrow at the "price for gold" box and change it to GOFO and Libor---it'll pop up the table for the rates:
My post to Harvey was when this site was in it's "transition stage" and all I could find was the site I posted. Now the LBMA actually posts the data.
It was very considerate of you to take the trouble to post that information.
Bron Suchecki hasn't updated his blog for some time. Is he already dead?ReplyDelete
such sensitivity, you must be aiming for an award? This blog is updated with more content than your mass hysteria blogs that post 50 bs stories a week with one real one thrown in to provide some sense of credibility.ReplyDelete
yeah I'm still alive :)ReplyDelete
FYI, this blog is personal and highly dependent on how busy I am at work, so posting is sporadic and comes in bursts
Jake i guess you have been wrong if we see the fall since january 2014, predictions are what they are - arent they ?ReplyDelete