A NEW BULL MARKET in Gold and Silver is about to emerge as four long year of price suppression is soon to END this month of June. As stated last week, the current wave is a final capitulation wave down to wipeout any remaining Gold and Silver Bulls before a NEW Bull market suddenly arrives leaving all but the permabulls behind!
A NEW Gold Bull Market breakout awaits those who have stood the test of time….
The gold stocks are almost certainly in the early stages of a major new upleg. Given the widespread apathy and antipathy still plaguing this beaten-down sector, that’s hard for most traders to swallow. But the gold stocks’ performance this year has already been outstanding.
And heading into gold’s strong season, their gains should only accelerate.
Gold stocks’ overdue mean reversion higher is well underway.
Dr Ron Paul, the popular Presidential candidate and America and the world’s most popular libertarian voice, told CNBC yesterday that he “still believes in gold” and that “gold could go to infinity.”
Paul informed the MSM host why the long term case for gold remains intact (while Jackie DeAngelis stated gold’s 8% performance year to date is disappointing):
“Timing is the only thing. I remember watching gold when it was 35 dollars an ounce and we thought if it ever hit a hundred dollars, the world would come to an end. And then a thousand dollars, so; no, it’s good as long as we continues to do this [print money] , you know, it could go to infinity because when people just leave the dollar, who knows what.”
Precious metals investors have endured much hardship during the recent bear market but David H. Smith, senior analyst with David Morgan’s The Morgan Report, believes that another secular bull market in precious metals is already underway. In this interview with The Gold Report, Smith says that platinum group metals will lead the resurgence and have a favorable long-term risk/reward ratio.
He outlines some PGM, gold and silver companies that can grab the bull by its horns.
The landslide win of Narendra Modi just days ago is viewed by Indian economists as the catalyst that will raise Indian GDP growth to 8%. The bottom line is that India’s gargantuan population is young, vibrant, and hungry for gold!
The only way for Indians to get the enormous amount of gold they will demand as their economy grows, is to buy it from mines owned by Western gold community investors.
Technical analysts assume past prices are a valid basis for predicting what investors will pay tomorrow.
The Warren Buffetts of this world act differently: they care not what others think and use their own judgement of value. This means that value investors often buy when the trend is down and sell when the trend is up, the opposite of technically-driven decisions. A bear market ends when value investors overcome the trend.
Technical analysis is a tool for idle investors unwilling or unable to understand true value. It dominates price formation in western markets and distorts investor behavior by exaggerating any natural bias towards trends. It is this band-wagon effect that is the root of trend-following’s success, but also its ultimate weakness.
A better strategy is to make the effort to value gold properly and then act accordingly.
The Indian nation election is arguably the most bullish event for gold of the past 100 years.
That election began yesterday. It’s the world’s largest national election, so it’s a long process. The results should be released around May 16.
Other than a bullet or vote counting fraud, I don’t think anything can stop Narendra Modi from winning this election. He is strongly endorsed by all of India’s major bullion and jewellery associations.
These “titans of ton” are ready to move massive amounts of gold from the Western gold community’s mines, to eager Indian citizen buyers.
The latest polls suggest major gold proponent Narendra Modi is just five weeks away from becoming the prime minister of the world’s most powerful gold buying community.
As recently as a few weeks ago the GOFO rates were easily accessible on the LBMA website. This site, however, recently suffered a makeover.
The GOFO rates are now extremely inaccessible, and unable to be downloaded in any form. Upon my inquiry to the LBMA, this was their response:
The LBMA do not own the gold and silver prices, we publish the prices on our website under an agreement with the London Gold and Silver Fixing companies, who own the data and who are responsible for setting the gold and silver prices on a daily basis. When we launched the new website, this was on condition that we prevented the data from being downloaded or scraped from the site. If you would like to be able to download the data you will require a licence from the Gold and Silver Fixing Companies.
Nice, no more GOFO data for the average Joe (or PM community) to analyze.
It appears the LBMA & cohorts are attempting to obscure the implications of the data that the GOFO rate implies.
Well guess what…GOFO is back negative again and the west to east gold exodus is long from over!
The bottom line is the hated gold stocks remain an extraordinary contrarian buying opportunity today. They’ve almost never been cheaper relative to gold, which drives their profits and hence ultimately stock prices. After the last episode of similar extreme undervaluation during the stock panic, the leading gold-stock index more than quadrupled over the subsequent years. Mean reversions always follow extremes.
So another epic mean reversion higher in gold stocks is all but certain in the coming years. This sector that has fallen out of favor for so long will gradually return to favor, as markets are forever cyclical. This will largely be driven by gold’s own mean-reversion recovery upleg out of last year’s extreme lows, which will lead to gold-stock buying. As gold stocks start outperforming, capital will flock to chase their big gains.
The gold-mining sector is on the verge of flashing the fabled Golden Cross buy signal. This is one of the most powerful and revered indicators in all of technical analysis. When it arrives after the right conditions, it flags the critical transition from bear to bull markets. And today’s gold-stock environment is perfect to spawn such a pivotal Golden Cross. Seeing this milestone will accelerate capital flows back into gold stocks.
As the year 2013 comes to a close, the Western super-crisis has entered a lull period, and an Asian citizen gold demand era begins. It could be said that your “Queen Gold” jockey is changing horses in 2014. She’s moving from a Western racehorse… to an Asian Clydesdale. In the biggest picture, I think this means that Western precious metals investors are going to have their golden cake, and eat it too!
If gold and silver are transitioning from a Western-centric bull market to an Asian-centric bull era, then super-sized chart patterns should appear in these markets, and this appears to be the case with silver.
The ratio chart shows a gigantic head and shoulders bottom pattern in play, and it suggests that in 2014 silver should begin to outperform the T-bond for many years, and potentially for decades.
“You have to be a buyer when people are non-believers. You have to believe in something based on data that says you’re right when the world will tell you you’re wrong, because when the world says you’re wrong and you’re right, you know that the return will be outsized because no one is there. It’s like buying gold stocks in 2000 which I did to a very large extent. The HUI index was at 35 and it went to over 600. It went up 1700% in eight years. And that’s because everyone was against it. It was like a killing field for an investor to go in and buy things cheap and I really believe it’s kind of a similar opportunity again today.
Once gold starts looking like, ‘Hold it now—maybe that secular bull market wasn’t over?’…All will be forgotten quickly. If the price of gold is $2000 Tekoa, you would not believe what the sentiment will be…They’ll all come in…you will have everyone trying to get through the same door at the same time and it could be quite stunning…stocks will go up multi ten thousands of percent!“
Eric Sprott is making a bet that we’ve reached the capitulation point in precious metals and that the precious metals will pivot sharply higher in the next 12 to 18 months. He rightly points out that by putting sort of $50 million into this bet…he might lose 50% of $50 million or $25 million…or if he is right about the timing of the move in precious metals and the quantum of the move of precious metals, he could easily turn that $50 million into $500 million. A bet where you have one chance of losing half your money and another chance of making 10 times your money to the extent that you can afford to make that bet—that’s how you build businesses like Sprott.
I’ve had the good fortune in my life to know 12, 15, 20 self-made billionaires and what segregates the billionaires, what segregates the people who get that last digit—is guts. You have to take risks…Every billionaire I know has been willing to take bets that were contrary to conventional wisdom at the time that were highly risky. You have to see a situation that you think has outsized possibility of reward and you have to really, really, really swing for the fence.”
Hedge funds smell blood in the water,” and will likely “make sure stops are run below $1179…probably Monday morning.”
“We’ve seen a lot of manipulation in the gold market over the last year & so I expect we’ll probably see one of those middle of the night hits, where they dump a million contracts on the market, so that when traders wake up in the morning their stops are already run…We may have another move, something similar to what happened in April, where the bottom just drops out.
I think we’re probably going to test that 2007 c-wave top at $1030, and that’s the point where I think every short will cover and we will get our final bear market bottom…and that’s the point where you can back up the truck.”
This was the week the Federal Open Market Committee decided to start tapering. The result was gold traded below $1200 Thursday for the first time in nearly six months, and silver pulled back to $19.10. Technical analysts see the $1180 level, from which the gold price rallied in late-June, as important; and with the price closing last night only $10 above it we are very close. If it holds, gold will have formed a bullish double bottom; if not technicians will start talking about $1150 and then $1,000 as price targets.
In his latest interview with Hard Assets Alliance, silver guru David Morgan discusses why he believes silver is a better long term investment than gold, why he’s not selling any of his metals, and his outlook for silver over the next few months.
Morgan expects gold to lead silver back to the 2011 highs, but once the $1915 and $48 nominal highs are taken out to the upside, silver to catch up and overshoot its historical ratio to gold of 16 to 1.
Morgan’s full thoughts on gold & silver are below:
The financial MSM would have you believe that the 10+ year secular gold bull has ended and that gold is heading down for the next 20 years.
Obviously the shills have no clue what the end of a massive secular bull market looks like.
Here is how you will know if the gold bull market has ended:
The move in gold can be very quick. I’ll give an example; We hit lows in July of this year and then in the month of August, metal prices turned around. The price of gold was going up but the mining stocks just took off. There were gains of 25%, 75%, 100% in the sector in the space of less than 20 days.
It illustrates how we can move from a market that’s operating basically on a no-bid basis where no one wants to buy, to suddenly getting into a space where no one is offering any stock and prices are forced up as a result of that. I’m quite convinced we’re going to see that again in the not too distant future, and that’s what makes it exciting in this space.”
Eric Sprott recently joined Matterhorn Asset Management’s Lars Schall to discuss the metals, QE, and how the great Keynesian fiat experiment is likely to end for Western governments.
Sprott claims that the West will one day soon regret all of its financial policies including QE, ZIRP, and gold suppression, and that the major governments carrying out these policies are now insolvent!
When asked by Lars what would be the signal to exit the gold and silver markets and what he views as the top in gold Sprott replied: For me to see a top in gold you would need to see 1 of 3 things: A maniacal blow-off. 2. The Central Planners become financially responsible (not likely). 3. If they finally capitulated and made their currencies gold-backed (which I don’t suspect we will see). I think we have a long way to go before we see any of those elements manifest themselves.
Already beleaguered, gold suffered another sharp drop this week. When the minutes from the Federal Reserve’s latest policy meeting implied it might slow its QE3 bond-buying campaign “in coming months”, futures speculators responded with heavy selling. But their extreme gold bearishness is highly irrational, they are missing the forest for the trees. Taper or not, quantitative easing remains super-bullish for gold.
“If you really have conviction for this sector, Then you have to review—have the fundamentals changed? And if the fundamentals haven’t changed, that’s a good reason to stay. Another reason to stay, is that the best time to buy is when nobody wants it. We’re certainly in the case right now in the mining shares, where really—nobody wants them. So that’s a great time.
In all [bull] markets…there gets to be an acceleration point, where it becomes the ‘got to have’ investment…and once that happens you get an acceleration in price to the upside, and I really expect that to happen in the metals. It’s not here, it’s not now—but I’m very confident it will take place.”