Given the stunning Indian and geopolitical price drivers now in play in Iraq, Syria, and the Ukraine, I think gold could charge beyond $1325, and on towards the $1347 and $1390 area highs.
Silver, which is perhaps better referred to as “gold on steroids”, looks even better. 

 

Submitted by Stewart Thomson, Graceland Updates:

gold

  1. A week ago, I suggested gold would likely decline from the $1300 area to about $1275 and stop there, adding bullish symmetry to an inverse head and shoulders bottom pattern.
  2. Please click here now. That’s the hourly bars chart for gold. It’s clear that gold declined to my targeted $1275 area “on cue”, and then surged higher early this morning.
  3. To view the bullish symmetry this price action created on the daily chart head and shoulders pattern, please click here now. This bullish chart looks like Michelangelo sculpted it, from a block of golden marble!
  4. Note the bullish action of the price stoker (14,7,7 Stochastics series). My first target is $1325.
  5. Given the stunning Indian and geopolitical price drivers now in play in Iraq, Syria, and the Ukraine, I think gold could charge beyond $1325, and on towards the $1347 and $1390 area highs.
  6. Silver, which is perhaps better referred to as “gold on steroids”, looks even better. Pleaseclick here now. The price stoker sits at an incredibly oversold level of about 10, and is now flashing a crossover buy signal, as it bursts above a key minor trend line. My suggestion to silver enthusiasts, is to be long and strong!
  7. The hardline Islamist group commonly referred to as ISIS has created a quasi-nation state of enormous size. It stretches across huge parts of Iraq and Syria. On the week-end, they apparently captured a Syrian airbase, and they have stated plans to capture not only Baghdad, but the entire countries of Spain and Italy. The ISIS leader, “Al-Baghdadi”, has a doctorate degree. It’s probably not a wise idea to underestimate the man’s capabilities.
  8. While I don’t think many analysts understand the seriousness of this situation yet, Mid-East geopolitics threatens to become a much bigger gold price driver than QE ever was.
  9. Over the past month, bank economists around the world have almost universally dropped their bearish viewpoints on gold, and adopted a generally supportive outlook.
  10. A “$1200 floor” is a common expression used by the top economic guns now. That’s a welcome change, and the gold charts certainly support this new and “improved” analysis, of the world’s mightiest metal!
  11. I’ve argued that the year of 2014 is a year of transition, from deflation to inflation. As a gold price driver, the economic super-crisis is on the back burner, and strong growth that produces relatively more inflation than GDP is on the front burner.
  12. Please click here now. That’s the latest PMI flash report for US manufacturing growth. It’s acting like a hungry pitbull. I’m predicting that it will only take three or four more such reports, to make high quality institutional money managers start ringing their inflation alarm bells.
  13. Rising food prices can create huge institutional liquidity flows into gold. Commerzbank agricultural market analysts are amongst the best in the business. To view their current analysis of the wheat market, please click here now.
  14. Please click here now. That’s the latest COT report for wheat. The commercials (aka the “banksters”) are net long the wheat market, while the hedge funds are net short! Is wheat on the verge of soaring higher, and will that produce sizable institutional liquidity flows into gold? I think so.
  15. In the big picture, India is the most important price driver for gold. The news coming out of the land of the “titans of ton” is now very bullish.
  16. Please click here now. While about one third of the entire population of India has no electricity, that state of affairs is changing very quickly. As Indian citizens get access to the internet, they are rushing to buy gold in online accounts. Over the next couple of years, I expect this online buying will go “off the charts”.
  17. Because a picture arguably speaks a thousand words, please click here now. The road sign says “Pot Of Gold Ahead”. I think that applies to any investor who owns shares of gold mining stocks.
  18. ‘Gold likely to regain sheen in second half of 2014: Despite the possibility of deficient monsoon casting a shadow on the rural demand, riding on overall better sentiments gold is expected to recover its sheen in the second half (July-December) of the year, Somasundaram P.R, managing director (India), World Gold Council (WGC) said. “The second half will be a better one as compared with the previous year. The first half (January-June) was affected by the 80:20 rule on exports and expectations that there will be a duty cut. “People were hoping that the price will get back to the Rs.25,000 ($413) per 10 grams zone. Then there was election till the second quarter (April-June), which did have its own impact on demand. There were also a lot of operational issues for the trade,” Somasundaram told IANS in an interview.’ - The Gulf Today News, Aug 25, 2014.
  19. If anyone deserves the “man of the year” title, it’s probably WGC director P.R. Somasundaram. I’m in complete agreement with his superb assessment of the current gold market.
  20. Gold is set to regain its sheen, and so are the mining stocks held by the Western gold community.
  21. Please click here now. That’s the GDX daily chart. GDX is in a nice uptrend channel now. In the short term, it’s consolidating in a bullish rectangle formation.
  22. My suggestion to Western gold stock investors is to treat the gold bull era like a fine wine.Savour each moment.
  23. Out with the old, and in with the new. The new era is not a chug-a-lug contest for “parabola demanders”. Nor is it a QE reunion party. This is a new era of consistently growing demand for gold jewellery, created from gold that is mined.
  24. Soon this key source of demand will surpass mine and scrap supply. The man who I’ve dubbed the world gold community’s man of the year, seems to be hinting it could happenright now!

Thanks!  Cheers  st

Stewart Thomson

Graceland Updates

MysteryOffer_82614

  1. Very interesting write up. Good synopsis. I am holding January ’15 calls on GDX. The miners have been showing relative strength in the face of stagnant metals prices which is a good sign. I think GDX has a really good chance to breakout going into the end of the year barring a major breakdown of gold. The risk/reward favors the upside from here.

    • I wish you the best on your calls.  They could give you some large rewards with little outlays

      The idea of gold going to $1,350 does not stir my soul like a price of $2,000

      $4,000 an ounce would be more exciting. The GDX and GDXJ would see some historic rises, maybe even exceeding the 9 month price just that ended April 2011.  I had some serious coin invested in these and leveraged silver and gold ETFs.  The drop in metal prices also provided some serious downward pain, particularly in the leveraged ETFs.

  2. Well let’s see here…..

     

    1 – What’s it tell you when the ‘pro’s’ (I use that word VERY loosely) are excited about 1347 or 1390 gold?  What happen to the moonshot predictions of just earlier this Summer of $2K+ ?   Looks like a call for continued weakness.

    2 – How can we be excited about 2015?  We haven’t finished 2014 yet!  I mean look back just twelve or even twenty-four months and you’ll see Au was supposed to be at $5K or better, the stock markets were to crash badly and global thermonuclear war was just an hour away.

     

    One day at a time and stack while it’s cheap.

     

    How about more articles on how to acquire the stuff, how to store it safely/hide it (NO, NOT IN BANKS!!!!) or something else other than another prediction.  Sure, include some charts or bullet points too – that always make things better.

    • @PoorMansGold – Yeah I hear where you’re coming from on the price predictions but I think a call for $1390 or so is much more reasonable than what we’re hearing from Bo Polny and the like. The only way we’re getting to $2K gold by the end of ’14 is if open war breaks out between Russia and Ukraine or a Comex default occurs. Both scenarios are possible but very unlikely at least for this year.

       

      Personally I think that a move to $$1450-1500 by the end of this year would set gold up nicely going into 2015. In the meantime I’ll keep building up my physical silver stack at a much lower price basis. I don’t understand how someone who is bullish on silver long term would happily buy at $30 but won’t pull the trigger @ sub $20. Makes no sense to me but to each his own.

    • @gogetter1132

       

      “I don’t understand how someone who is bullish on silver long term would happily buy at $30 but won’t pull the trigger @ sub $20. Makes no sense to me but to each his own.”

       

      No, it doesn’t but let me take a shot at this.  When silver prices are relatively high, people want to “jump on the band wagon” so as to not be left behind in the event that silver makes another substantial run up in price… such as it has before when it went to $50 in 1980 and again in 2011.  When silver prices are relatively low, such as they are now, there is little interest in grabbing it while the grabbing is good.  It’s flat-lined and not going anywhere, so what’s the rush?  Lots of people specialize in knee-jerk reactions to stimulus and this is yet another example, IMO.  Stackers, on the other hand, are very much aware of the fact that silver is at very attractive prices these days and that it is smart to acquire as much as one can comfortably afford at these prices… while they last.

  3. There is just no excitement in the PM bloggosphere for 2014.  It would be a miracle if gold finishes the year over 1400 and yes, this would set us up nicely for a decent 2015.  If gold does absolutely nothing between now and the end of the year except trade sideways to lower that would not bode well in my opinion for the first half of 2015.  We need the bear market to go away and leave convincingly.  The bear is dead.

  4. The problem most of the middle class that are privy to the events unfolding is that they have no spare savings to convert to PM’s.  The way things are taking shape,  it looks like the masses of middle class Americans will be caught between a rock and hard place. It’s one thing to be unaware and sheepish, but it’s quite another to watch events happening with knowledge and be in a position to not be able to do much to protect yourself when you see the storm forming.

    • @regaleagle spot on my friend. I am nowhere near prepared, trying hard to get ready but not  much to play with. Seeing what’s coming and not being able to do what I think is needed is frustrating and scary. So for me, the longer they hold this together the better.

      JC

  5. Everything that happens in the paper and physical precious metals market is designed to accomplish one primary goal–the elimination of actual ownership of precious metals by the Average Joe and Jane.  If you beat up the price of precious metals via any sort of price rigging you  strike a chord of fear in the people.  If the powers that be seduce the unwary by kiting the stock and bond markets, the unwary will flood to that investment.  ZIRP creates a climate of extraordinarily low rates, allowing the banks and governments to steer and corral people’s funds into exceptionally risky investment that were formerly fairly safe.

    When these paper market can create an illusion of profit, return, capital gain, the people will race there to get some yield.  When precious metals are smashed down by 40-60%, the people will avoid these things for fear of further loss.

    It might be appropriate to note that buying when others are selling and buying when blood is in the streets applies to precious metals because those things are happening.  It’s very tough being a contrarian when everyone around you is losing their heads and your best thinking is beset by trolls, shills and chicken littles   Stay the course, buy when you can because when the frenzy hits, as it inevitably does, the Average Joes will seek precious metals.

    I do not know when this will happen but surmise that it will happen within a few years.

    Until then just bide your time

Leave a Reply