I am little cautious here on gold stocks, at least as it concerns new positions. My concern comes primarily from a step in the timing models and some interesting dynamics in the non-seasonally adjusted money supply.
The latter first, this is the second week in a row where reported monetary supply was significantly weaker than I expected and below typical seasonal trends. For the latest reported week, non-seasonally adjusted M2 came in below $10.5 trillion or falling nearly 1% week-over-week. Strangely enough, this is second week in a row that the monetary supply fell 1% or more as compared to the previous sequential week. Too say this is an abnormal occurrence is an understatement. Since 1980, two back-to-back sequential declines of 1% or more has occurred in only three instances, including the present period. What does this mean, if anything. I don't know. There are far too few instances to try to make any statistical analysis let along infer any meaning. Looking forward, I am keeping with the general seasonal trends in money supply when making my estimates, but I think the present results bear some watching.
With that said, the moderation in money supply, gold prices that have traded in a range between $1,430 and about $1,470 per ounce for a weeks, and an average increase of about 5% since the Phily Gold/Silver miner index bottomed around April 15th has led to an uptick across the three timing models. Taken together, I would not be seller of gold/precious metal shares in here, but I am not a buyer either.
For reference, here are the latest results for the timing models
3-Month, -0.92
6-Month, -1.43
1-Year, -2.03
The latter first, this is the second week in a row where reported monetary supply was significantly weaker than I expected and below typical seasonal trends. For the latest reported week, non-seasonally adjusted M2 came in below $10.5 trillion or falling nearly 1% week-over-week. Strangely enough, this is second week in a row that the monetary supply fell 1% or more as compared to the previous sequential week. Too say this is an abnormal occurrence is an understatement. Since 1980, two back-to-back sequential declines of 1% or more has occurred in only three instances, including the present period. What does this mean, if anything. I don't know. There are far too few instances to try to make any statistical analysis let along infer any meaning. Looking forward, I am keeping with the general seasonal trends in money supply when making my estimates, but I think the present results bear some watching.
With that said, the moderation in money supply, gold prices that have traded in a range between $1,430 and about $1,470 per ounce for a weeks, and an average increase of about 5% since the Phily Gold/Silver miner index bottomed around April 15th has led to an uptick across the three timing models. Taken together, I would not be seller of gold/precious metal shares in here, but I am not a buyer either.
For reference, here are the latest results for the timing models
3-Month, -0.92
6-Month, -1.43
1-Year, -2.03
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