Monday, November 2, 2015

Predicting the price of gold with the Venus-Mars conjunction

(2 November 2015)  It's not a good time to be a gold bug these days.  After peaking in 2011 above $1900, gold has since fallen 40% and shows few signs of returning to those lofty levels.  Not even recent strong hints from the European Central Bank (ECB) that it will begin a new round of QE managed to do much for the yellow metal.  With official inflation still below 2% in most developed economies, there is less need for the safe haven as a traditional storehouse of value.  While recent currency volatility has made gold somewhat more attractive to investors in emerging markets and other commodity-based economies, its value as measured in US Dollars remains low.  Gold took it on the chin again today as it declined $8 closing at $1133. 

As I have noted in previous posts, there are many astrological factors to consider when accounting for fluctuations in the price of gold.  Certain horoscopes figure prominently such as the chart for the first London gold fix in 1919 and the chart of the first US futures trade in 1974.  There are also any number of simple transit influences on gold.  Financial astrology typically relates the condition of the Sun and Venus to gold prices.  The Sun symbolizes government and historically a nation's currency was expressed in terms of gold and silver.  Venus enjoys a special affinity to gold because it is seen as representing value and luxuries. As a planet of abundance and expansion, Jupiter is also associated with gold.  Jupiter's connection with gold may be as a result of its symbolism of growth expectations and inflation, both of which are closely tied to gold prices.  The more expansionary an economy, the greater the inflationary pressures and hence the likelihood that gold will increase in value. 

This week I thought I would examine one simple planetary pairing and its apparent correlation with gold prices -- Venus and Mars.  I would argue that when Venus is strong and well-aspected, gold is more likely to rise.  Venus is said to be strong when it is transiting one of its own signs like sidereal Libra or Taurus, or its sign of exaltation, Pisces.  A well-aspected Venus would be one that is under the influence of Jupiter or perhaps Rahu (North Lunar Node).  Uranus, Neptune and Pluto may also be positive for gold prices if they form soft aspects with Venus.  But when Venus is afflicted by malefics like Saturn or Mars, we should expect the price of gold to come under pressure. 

This is exactly the situation in recent days as Venus has conjoined Mars in the last degree of Leo.  The exactly conjunction takes place today and tomorrow (November 2-3).  Due to the retrograde cycle of Venus, this is the third Venus-Mars conjunction this year.  In years when Venus is not retrograde, there is only one period of conjunction which lasts about 40 days.  Rather than narrowing down the exact conjunction to a single day, I like to think of it as conjunction window -- a period of about 40 days on average where Venus and Mars are separated by less than 10 degrees of longitudinal arc in the sky.  If neither planet is retrograde, this means that the faster-moving Venus will approach its conjunction with Mars for about 20 days and then gradually separate from Mars over the next 20 days.  This 10-degree conjunction window can vary substantially when either planet is retrograde. 

The previous Venus-Mars conjunction took placed in August and September in sidereal Cancer and Leo.  When retrograde Venus came to within 10 degrees of Mars on August 22nd, gold traded at $1159.  By the time Venus formed an exact conjunction on August 31st, gold had fallen to $1133.  When Venus was 5 degrees past Mars on September 7th, gold fell further to $1120. 

As a complicating factor, Venus ended its retrograde cycle on September 6th and began to move forward again.  This meant that Venus started to approach a conjunction with Mars again and was never located fully 10 degrees away.  At its furthest angular separation of 9.5 degrees in late September, gold prices recovered somewhat to $1145.  This was still lower than the $1159 at the beginning of the conjunction window but much less so than at the time of the end of the retrograde cycle.  So we can say that this retrograde cycle and unusually long period within the 10 degree conjunction window puts an asterisk next to this particular Venus-Mars conjunction.

Actually, we are still in that same unusually long Venus-Mars conjunction window that has been active in August 22nd.  For illustrative purposes, I have separated them in the chart and table below but the conjunction is still ongoing.  Venus will finally move out of range in late November. 

Before that, Venus conjoined Mars in early 2015.  When Venus approached Mars to within 10 degrees on January 31st, gold traded at $1283.  By the time of its exact conjunction on February 22nd, gold had fallen to $1201. On the day that Venus was separating by 10 degrees on March 15, gold had tumbled further to $1153.  This was a strong correlation that lasted well past the exact conjunction.  The standard astrological assumption is that the affliction by a malefic planet like Mars is greatest on the day of the exact conjunction.  As noted above, however, we know that this is only one factor out of many to consider.  The apparent negative correlation between price and the angular separation of Venus and Mars may manifest well past conjunction in some instances.

The chart below lists the dates and price correlations the last five Venus-Mars conjunctions.  N.B. There were no conjunctions in 2012 or 2014.

    Year          angular separation           Date           Gold Price  
   2011           -10     May 2       $1577
              0     May 22       $1508
           +10     June 12       $1529
        Net Change -4%
   2013             -10       March 16       $1604
               0       April 7       $1573
             +10       April 27       $1462
        Net Change -8%
   2015             -10       Jan 31        $1283
                0       Feb 22        $1201
              +10      March 15        $1153
        Net Change -10%
   2015           -10      Aug 22       $1159
              0      Aug 31       $1133
             +10*      *Sep 25       $1145
       *only 9.5 degrees     Net Change -1%
             -5       Oct 21      $1166
              0       Nov 2      $1133
             +10      Nov 23       ???

While this correlation looks fairly solid, it doesn't always hold.  In late summer 2010, gold prices actually rose sharply during a Venus-Mars conjunction.  This anomalous result does not necessarily invalidate the effect of Venus-Mars conjunctions on gold but merely reminds us that it is one factor among many.  It may not even be the most important factor at any given time.  In 2010, I would note that Venus was stronger than normal because it was transiting Libra, a sign it rules and does well in.  So that was one mitigating factor to reduce the negative effects of Mars.  Also, there was a very close conjunction of Jupiter with Uranus at that time.  This was likely bullish for inflation expectations and hence gold prices were more likely to rise, Venus-Mars notwithstanding. 

So what will happen to the price of gold over the rest of the current conjunction window?  By tomorrow, the Venus-Mars conjunction will be in the first degree of Virgo.  Venus is said to be debilitated in Virgo so that may be an added burden for gold besides whatever effects Mars may exert.  The conjunction window will end on November 23rd so it seems fairly likely that we will see gold fall below its current levels at some time between now and then.  However, it doesn't mean that it will be at its lowest point at the end of the window.  The low could come well below that end date, and indeed even after it as well.  The 10-degree window should only be seen as an approximate guide to the assessing the influence of this pairing. 

Weekly Market Forecast

Stocks were generally mixed last week as investors digested the latest indication from the US Federal Reserve that a December rate hike may be forthcoming.  US stocks held steady as the Dow ended fractionally higher on the week at 17,663.  Emerging markets such as India sold off as the Sensex lost 3% closing at 26,656.  In last week's market forecast, I thought that the market would likely move lower on the various Saturn influences.  Tuesday and Thursday were indeed lower in the US and the selling continued into Friday in other markets after the Fed announcement.

This week has so far started on a positive note in the US, although Asia was more bearish on Monday.   Tuesday's Venus-Mars conjunction in Virgo increases the probability of some downside in the days ahead although it may not occur immediately.  Wednesday and Thursday may be more problematic in this respect given the Moon-Saturn aspect that pervades both of those days.  Overall, I think the planets are leaning bearish.  As I have written previously, this transit of Venus through sidereal Virgo over the next four weeks is usually negative for stocks.