Ive been following these guys for the last few months on the bullion or precious metals. Credit where it is due. The German bullion team have done a good job over the last few months and so i’ll be posting their weekly technical view of the bullion markets, for a trial period at first to see if they become a regular here.
They have been bearish from the 2011 high and correctly so. I’ll be clear here up front that this latest report is also a little bearish. But as Faber advises. (Im paraphrasing).
“Always takee time to read those reports that take the other side of your own position to explore whether you have missed something”.
I agree with this view 100%. (Especially where the analysis team has scored some successes as these guys recently have)!
In my view, the validity of technical reports are not a question of correctly calling future price moves. Its more a case of, do you have model that calls out the levels correctly. And are you able to adjust your models to accomodate unexpected movements to capture the failed levels or breakouts etc. If they fail to adjust their model and dont convince us ill be quick to take their weekly report off the site and find a better report.
This week, apologies a few days delayed as i was reviewing whether to make their report a regular, the Germans call a continuation of the short term range before an end of August and Sept resumption of the bullion bear with 1325 (gold) in their line of sight. They are considerably more bullish euro gold (XAD5) with a breakout of the 2011 high in line of sight. You can conclude from this that they anticipate a continuation of the euro decline vs the US$. This bearishness steps across all the bullion markets of Silver, Plat and Palladium. They forecast more weakness to come.
Having fished around the bank’s other research teams I see they are bearish on the macro front. Macro wise, they are expecting a strong US$ and a continuation of global deleveraging. They see no short term successful monetization by the ECB or any other central bank pre US elections.
If monetary events play out the way the Germans expect then i would accept their technical view even accepting the seasonal September up draft.
On the gold silver ratio the 60 level is in line of sight and a continuation of the current trend is likely in their opinion.
I remain long the core and ive recently added leverage via futures, options and increased cash holdings of pms and their miners. “make or break’ is a good phrase accross multiple market asset classes right now. Bullion is no exception.
Lastly, if i could mention one thing, very briefly. Monolithic trading approaches are always the most dangerous of market approaches. The most consistently high achieving investors and traders accept that no one can predict the future and its timing. Trading approaches that accept the chaos of world events and capitalize on its unpredictablility out perform.
As Soros wisely said:
“Success in the investment world is not about right or wrong but simply making sure your winners make you more than your losers cost you”.
I’ll leave those wise words with you and sign off. I hope you enjoy the regular report.
Com-BullWeeklyTechnicals-08aug12
All the best
Rich
(12 votes, average: 5.00 out of 5)
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