gold morgan oilBarring a black swan event, lower oil prices are quite likely in 2014, and that should be viewed as very good news for gold investors!
Lower oil is good news because oil imports are the main cause of the Indian current account deficit (CAD). The current Indian government has done nothing substantial to reduce oil demand and transportation costs for its poor, so only lower oil prices in the market can affect the CAD.

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Submitted by Stewart Thomson:

  1. The world’s largest political risk consulting firm is Eurasia Group. In an interview with CNBC news yesterday, company president Ian Bremmer predicted that in 2014, oil could easily fall to $80, or much lower. For more information on Eurasia Group, please click here now.
  2. “Even without an Iranian deal, the Saudis are going to have to reduce production just to maintain a price floor above $80 [a barrel] by the end of first quarter,” Bremmer said. If an Iran deal happens, we’re going well under that. The Saudis won’t be able to keep that going….” – CNBC news, Jan 6, 2014.
  3. Barring a black swan event, lower oil prices are quite likely in 2014, and that should be viewed as very good news for gold investors!
  4. Lower oil is good news because oil imports are the main cause of the Indian current account deficit (CAD). The current Indian government has done nothing substantial to reduce oil demand and transportation costs for its poor, so only lower oil prices in the market can affect the CAD.
  5. The Indian government has, unfortunately, engaged in vicious attacks on the world’s largest gold jewellery businesses, and impoverished millions of goldsmiths. That has indirectly hurt Western gold stock stakeholders. In a page probably taken from a “bizarre and surreal actions” handbook, the current Indian government has begun openly discussing the idea of regulating the amount of gold an individual Indian bride can receive at her wedding! This type of freedom-restriction is not economic progress.
  6. Indian government gold import restrictions risk creating a “gold jewellery stone age”, where Indian mobsters take total control of the world’s largest gold market. Until the restrictions bombshell exploded, Indians were the main end users of gold produced by Western mining companies.
  7. Demand drives price. With demand taken off the table, it’s difficult for the price of mining stocks to rise significantly.
  8. Gold ETPs (exchange traded products) are bought mainly by Western investors. They buy gold as a “flight to safety” trade.
  9. Unfortunately, in the big gold demand picture, the amount of gold these Western investors need to buy, to make up for current lost Indian demand, is far beyond anything they are likely to purchase, unless there is a new and extremely dire financial crisis.
  10. Another financial crisis that threatens the existence of the financial system will almost certainly occur, but it could be many years away.
  11. For the sake of all gold market stakeholders around the world who want realistically higher prices, it’s critical to get the Indian import restriction yoke off the global gold market’s back, permanently.
  12. Quite frankly, neither a temporary import rule change, nor a blip in ETP buying, are medicinally strong enough, to heal the gold price patient.
  13. Luckily there is a potential white knight, dressed in real golden armour. India’s opposition leader Narendra Modi is pro-gold. He’s now the leader in national election polls, and is keenly endorsed by India’s most powerful bullion and jewellery associations. His home state of Gujarat has a population of about 60 million people, and a stunning unemployment of only about 1%.
  14. To better understand the economic miracle this gold-endorsing corruption fighter oversees, please click here now.
  15. If oil prices are dropping under $80, as “Modi Man” gets elected, he’s likely to take quick and decisive action to end import restrictions, and boost employment in the gold jewellery sector. So, I’m not selling any gold stocks. I’m buying them!
  16. There’s more good news for gold and gold stock enthusiasts. From a technical perspective, oil also looks to be headed quite a bit lower.
  17. Please click here now. That’s the daily oil chart. A significant head and shoulders top is in play, and it could morph into the head of a much bigger top pattern, with very bearish implications.
  18. Beginning with lower oil prices, a sea change in Indian demand for gold mined by Western mining companies could produce much higher gold stock prices in 2014.
  19. On that note, please click here now. This GDX daily chart shows significant volume since April, and now there’s a potential bullish wedge pattern breakout in play.
  20. A two-day close above $22.75 is likely to attract momentum traders, and many individual issues are moving strongly higher already.
  21. Please click here now. That’s the GDXJ daily chart. The technical action of junior gold stocks is much more bullish than for senior stocks. The wedge pattern is shaped better (the lines converge more), and the breakout is not tentative or potential. It’s solid!
  22. Having said that, note the position of my stokeillator (14,7,7 Stochastics series) at the bottom of the chart. The lead line is now at about 78. Traders should be booking light profits here. My suggestion is to hold those profits in a gold ETP, rather than in US dollars.
  23. If the rally continues, traders will still make some profits against the dollar, and if it ends, they can likely buy more stock than they sold, because gold bullion tends to decline more modestly than gold stocks do.
  24. If oil rises in 2014, it’s likely to be related to the nuclear situation in Iran going out of control, and that’s good for gold. More likely, oil falls hard in 2014, and that’s also good for gold, and great for junior gold stocks!

Special Offer For Website Readers: Send me an Email to and I’ll send you my “Silver Doesn’t Tarnish In 2014!” report. I’ll show you what key stocks I’m focused on in the silver sector, and the price scenario I see for silver against gold, in 2014.


Thanks! Cheers  St

Stewart Thomson

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  1. Keshe Foundation to Destroy Precious Metals Market?
    In a long post by Mr. Keshe he outlined their plans for 2014 including this paragraph:
    “We give and facilitate the release of technology to the men of greed that they can produce enough gold and precious metals that they could wish for, that eventually they will shy away even to show any interest in possessing such materials.”
    Looks like they can keep selling to China forever!  LOL

  2. Total Genius Stewart.
    India is the puppetmaster here.
    Modi will get in, there will be a reversal of policy and an absolute tsunami of gold buying in India that will break the inventories.
    May/June 2014 is the period to watch.

    • Crazy.
      One theoretically contributing factor promoted to game changer. While actually the physical demand for gold has NO effect on its price. 
      Without the futures market used as price setting, and the London fix as daily discount, there will be no logic to gold prices.

  3. While Stewart says that lower oil prices are quite likely in 2014, from where I am sitting the price at the gas pump went up just before Christmas and they are still increasing.
    Even though I tip my hat to anyone brave enough to predict where Oil and PM prices are going – the fact is NOBODY really knows what is going to happen in 2014.
    And while in a laboratory experiment it is possible to control one input and determine how the outcome changes as the input is varied, there are too many variables in the Real World market to be certain how one thing affects another.
    Thus, it is entirely possible Gold prices may rise when Oil goes down.

    • “…the fact is NOBODY really knows what is going to happen in 2014.”
      Amen to that, Brother Woolly.  We live in a world wherein the highest technology available cannot reliably tell us what the weather will be next week, let alone what stock, gold, or oil prices will be several months from now.  But… this is where the “gut” comes in, as it is not bound by science.  Intuition is that which many have used to leap the gap between that which is known and possible to that which is not – at least according to conventional thinking.  But virtually all human progress of a substantial nature has occurred via those few who refuse to accept conventional thinking as a limiting factor.
      As to predicting lower oil prices in 2014, I wonder if the people making that prediction have purchased a lot of put warrants on oil stocks.  If they have not, then perhaps they do not have the courage of their convictions.  My thought is that if oil prices go lower in 2014, it will mean that the US and other major economies are truly flat on their backs, simply not using the oil that can be produced, and that oil producers will be scrambling for customers via any means necessary, including price cuts.
      If lower oil prices occur in 2014, then that would help the miners because a lot of their heavy equipment runs on diesel fuel.  A lower cost for fuel would help the economics of ore extraction, crushing, and transport.  However, if the reason why oil prices are reduced is that the major economies of the world are in a depression, then that could also affect the prices of metals.  This could be a tug-o-war situation wherein predicting the result is quite difficult.

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