GM Jenkins' 2014 Predictions

Happy New Year, friends! 

First, a retrospective. Screwtape was forged out of the fullest heat and fire of the gold and silver mania of 2010-2011. I call it a mania now, though I didn't at the time. And that, to me, was the most important lesson of 2013. See, back in the day, it seemed more reasonable (to me, anyway) to interpret the then-ballooning prices of all hard assets as fundamentals-based.  2013 disproved that interpretation. Don't get me wrong: in all likelihood, the unrelenting, world-historical forces of Sociopathy and Folly that drove the world economy to the brink in 2008 simply took a breather in 2013, licking their chops and gathering strength for another foray at the global hippopotamus this year (or this decade, or next decade). Still, the fact that such a pause and major reversal could occur tells us that the price action of 2010-2011 was primarily speculative mania.

With that important lesson in mind, I believe price charts have become more important than any fundamentals-based arguments (e.g. of the "1001 reasons the dollar is doomed" variety you see on Zero Hedge once a week). My goal being to make money in 2014, my resolution is to avoid letting the bone-crushing stupidity of the American population, the knee-weakening asininity of the mind-bogglingly corrupt politicians, and the eye-watering chutzpah the Wall Street scumbags influence my investment decisions (especially short- and intermediate- term decisions).

A final point about 2013. For those wondering if or when the gold market will resume its long term bull trajectory, I say that the action of Q4 has been as ominous as the bloodbath that began Q1. I say this, because regarding the April crash, a violent washout and capitulation was certainly due after 12 years of price increases, and probably even healthy. So we saw the historical drop in April, and then the other shoe fell in June, giving the charts at least the potential to form a text book reversal (I've been arguing against that interpretation, but it was certainly a possibility). See the inset in the chart below to get an idea of what that might've looked like: I simply reversed the price action of the past 3 months. However, the actual grind downwards has no appearance of forming a bottom. None of the long "hammer" candlesticks, for example, that signify a capitulation. Not even a lot of volatility. And of course, a new daily (and weekly, and monthly) closing low.

And so in short, 

though gold may have a relief rally, I believe it will break below its hugely important, never-been-broken, weekly-closing-price trend lines on the linear and log weekly charts [green and blue, respectively, on charts below], and that's a bad sign.

Linear, weekly closing prices
Log, weekly prices

Given that even the most optimistic interpreters of the past few years' price action must concede that gold is undergoing a major correction, it makes much more sense to me that the 50% Fib line of the entire post-2000 bull market will be hit before a capitulation occurs. Looking at the log weekly chart above, and the monthly chart below (as well as the daily chart, not shown), that level appears to be the $1050 level, so I expect a bottom in the monthly, weekly, and daily closing prices somewhere between $1000 and $1075, for another 10-20% drop.

Calling my bet with Turd [UPDATED]

Hullo, Screwtape types. It's been a long time. Did you miss me?

So, those of you with long memories will recall my post at the end of 2012, setting out the case for gold being about to enter a serious bear market. At the time, gold was at $1672/oz (woah - remember those days..?) and had put in rather a stinker of a year.

I pointed out the simple, almost trite, fact that anyone - ANYONE - who had advised you to buy gold during 2012 had been wrong. Not maliciously wrong, perhaps, but wrong anyway. And I thought that this fact should arm the future readers of the silverogosphere in 2013 when considering their next steps.

The All-Important Chart for Gold & Silver Post-Fed Meeting [UPDATED]

Sorry I stole the title from King World News.

 If this line is broken on a weekly close, I say gold won't recover for several months, maybe several years.

There's still Friday, though, for the optimists among you. And King World News ...

The Earliest Known GLD Bar Lists

This article will only be of interest to fanatic bullion bar list historians - I am pleased to announce that with the help of some great individuals, we now have copies of some of the earliest known bar lists for the GLD ETF.

I am grateful to the collective efforts of FOFOA and Ro' on this one - they knew I had an interest and applied a better approach to researching the topic than I did. Prior to this discovery our earliest bar list was from October 2009. As a quick reminder : we're interested in the GLD bar list because it is the biggest and best data source for public weight lists - it constitutes 80% of the bullion bar information we have in the database (currently over 54 million rows of data).

Kid Dynamite: Sell Gold, Crash JP Morgan

Kid Dynamite launched a new campaign today to turn the tables on the evil manipulators. If you ever wondered which side of the coin he is on, then look no further than his great satirical article. Whatever happened to the original 'Buy Silver, Crash JP Morgan' campaign anyway? Did anyone ever do any proper mathematics to figure out whether it would work? Did Max ever declare it a failure? What I mean is, the campaign idea itself worked really well - it got a huge amount of social media traction and many (myself included) bought ounces of silver, and across the world millions of ounces of silver were bought during that time period. Yet JP Morgan seems to be unscathed ...

JP Morgan appears to be losing itself several billions of dollars anyway - through various fines of misconduct and illegal whatever, but I suspect the driver is more about cash-starved governments than it is about justice, and in any case the bank just shrugs off those massive fines and goes about its business. No, if you want to take out JP Morgan you gotta do it properly - Wynter Benton style with the $36/oz silver bomb kneecapping exercise. Damn those guys were smart. Funny though, we haven't heard a word from them ever since they publicly failed to move the price of silver ...