Gold Reaches "Faux All-Time High" with $47 Premium, S&P 500 Faces Textbook Oversold Conditions

Strategic Insights -

Gold futures have reached a "Faux All-Time High" with a significant increase in the December "front month" premium, marking a significant shift in the precious metal's market. Despite a positive week for the gold market, the current price is -169 points below the actual price, indicating a strong premium. The precious metals equities have seen notable gains year-over-year, with Agnico Eagle Mines and Pan American Silver leading the pack. Meanwhile, the S&P 500 is now in textbook oversold conditions, with a live price/earnings ratio of 37.8x, 49% above its conception in 2013.

Key Takeaways:

  • Gold futures have reached a "Faux All-Time High" with a +47 points of December "front month" premium.
  • The gold market experienced an up week, even without a premium, and reached a high of 2486.
  • The precious metals equities have seen notable gains year-over-year, with Agnico Eagle Mines (NYSE:AEM) +55%, Pan American Silver (NYSE:PAAS) +34%, and gold itself +29%.
  • The S&P 500 is now seven consecutive trading days "textbook oversold."
  • The Gold Futures Chart shows that the 15-point difference between the Faux All-Time High (2523) and true December All-Time High (2338) is immaterial.
  • Gold's expected monthly trading range is currently 139 points.

Statistics:

  • +47 points of December "front month" premium in gold futures.
  • 2486: the high reached by the gold market in the latest week.
  • 55%: the year-over-year gain in Agnico Eagle Mines (NYSE:AEM) stock.
  • 34%: the year-over-year gain in Pan American Silver (NYSE:PAAS) stock.
  • 29%: the year-over-year gain in gold prices.
  • 25%: the year-over-year gain in the VanEck Vectors Gold Miners ETF (NYSE:GDX).
  • 22%: the year-over-year gain in the Global X Silver Miners ETF (NYSE:SIL).
  • 19%: the year-over-year gain in Newmont Goldcorp (NYSE:NEM) stock.
  • 10%: the year-over-year drop in Franco-Nevada stock post-Panamanian mining disruptions.
  • 20.0%: the year-to-date gain in gold prices, according to BEGOS Markets standings.
  • 19.4%: the year-to-date gain in sister silver prices.
  • 17.7%: the year-to-date gain in gold prices, excluding the December contract premium.
  • 49%: the increase in the S&P 500's live price/earnings ratio from 25.4x in 2013.
  • 37.8x: the current live price/earnings ratio of the S&P 500.
  • 7: the number of consecutive trading days the S&P 500 has been "textbook oversold."

Sources:

  • BEGOS Markets
  • U.S. Bureau of Economic Analysis
  • Federal Reserve
  • Dow Jones Newswires
  • VanEck Vectors
  • Global X
  • Newmont Goldcorp
  • Franco-Nevada
  • Agnico Eagle Mines
  • Pan American Silver
  • S&P 500