The chart below is arguably the global financial markets’ “chart of the year”.  The massive bullish wedge pattern in play on this daily bars GDX chart looks truly spectacular.
Note how close GDX is to staging a significant upside breakout above the supply line of the wedge! Within GDX itself, many of the component stocks are staging massive upside rallies.
That suggests a GDX breakout is now imminent.

goldThe massive bull wedge pattern in play suggests than an “institutional awakening” is at hand for the gold stocks sector, as the oil supply glut and Janet’s rate hikes send global stock markets into a financial gulag. I’ll dare to suggest that equity-oriented money managers are soon going to view gold stocks as asset class champagne!

goldIn the big picture, the good news is that the dollar is showcasing a huge head and shoulders top pattern against the yen, and a major uptrend line has been decisively penetrated to the downside.
In the short term, unfortunately, the dollar is likely to rally back to the broken trend line, and that could put some temporary pressure on the price of gold. Gold is likely to ease to $1033 – $1045, if the dollar rallies against the yen.
From there, the largest gold rally seen in many years is likely to occur, as the dollar gets crushed by safe-haven buying of the yen.

hyperinflationThe dollar has staged a major breakdown against the yen, and large FOREX traders tend to base their dollar-gold trades on the dollar-yen chart action, more than on movements in the overall dollar index (USDX).
In the short term, I expect the dollar to rally a bit against the yen, and that could push gold modestly down, to the $1070 – $1080 area.
From there, I expect the dollar to stage a major decline against the yen, creating a massive rally in gold.

rocketOne of the most important fundamental events of 2016 in the gold market is the launch of the Shanghai Gold Exchange (SGE) gold benchmark.
The launch could occur in April, and it’s possible that India cuts its gold import duty around the same time. This is very bullish for gold.
While gold, the mightiest of metals, is off to a flying start for 2016, things are certainly looking “less than rosy”, for the US stock market…

Indian goldIndia continues to move closer to a massive 80% chop in the gold import duty.
The news for silver is, arguably, even better than for gold!
Indian imports of silver have been surging, and are approaching 8000 tons on an annualized basis. The import duty applies to silver as well as to gold.
A chop in that duty could lead to even bigger demand for silver.

imagesThe Western gold community is now entering the year 2016, as gold approaches another mighty support zone, this time at $1033. It’s unknown whether gold enters that support zone, or rallies from just above it.
What is known is that this is a major buying area, and a generational low appears to be in the works for both the bullion and the miners.
Intestinal fortitude, and nurturing of investor spirit, are all that is required now. 

At some point in the future, the highs in the $1900 area will become a major support zone, as the $1033 area is now.
Note the rising volume with rising price, and declining volume, with declining price. The primary trend is unchanged, and it is bullish.

Indian goldThe December 15 – 16 FOMC meeting is arguably the most important meeting of the past seven years. That’s because Janet Yellen can’t simply “flip a switch” to raise rates the way her predecessors could.
Because of the Fed’s QE program, the refusal of the US government to downsize itself has not resulted in a debt crisis. That may be about to change.  

gold bullThe December 16th FOMC decision is critical for gold, because the Fed may decide to raise the Fed Funds rate, while keeping the ERR (excess reserves rate) static.
If that happens, the banks will remove money from the Fed, and begin loaning it to each other, creating a new bull market in money velocity.

PutinCurrently, most commodity indexes are dominated by oil, and game-changing events in the mid-East region are poised to occur in 2016.
Gold tends to track oil very closely. I expect oil to stage roughly a 50% – 100% rally from the 2015 lows, over the next 18 months.
Here’s why:

liquid goldIt’s a waste of time for amateur investors to read bearish analysis now, while giant banks buy gold with both aggression and size.
The bottom line is that Western gold community investors can feel very comfortable, here and now, with their accumulation of the world’s ultimate asset!

Indian goldAny company that succeeds in making Indians absolutely comfortable with buying gold online would probably have an effect on the price of gold that is second only to a US financial system implosion.
The shocking online demand growth statistics in India, released by online sales company Amazon this morning, suggest that such a situation may be much closer at hand than most analysts realize.

cliff edgeGold burst upside from a symmetrical triangle pattern, as I predicted it would, and a painful pullback to the apex (about $1130 in this case) is typically the next technical event to occur.
The banks are likely anticipating this pullback, and adding short positions to profit from it. Gold is showing tremendous resiliency after the breakout.
Is a Scary Drop, and then a POP ahead? 

imagesI’m a keen owner of silver and silver stocks, which are now poised to begin outperforming gold. Silver enthusiasts don’t need to own more silver than gold to benefit from a period of outperformance by silver. They just need to own a decent amount of this mighty metal.

goldFrom the apex area, a surge to my technical target area of $1250 seems quite attainable, given the fundamental background of weak global equity markets, the PBOC’s new gold buy program, and surging demand in India.
The cold reality of what I call the coming “bull era” is that most Western gold investors, including myself, got into gold for reasons related to the fear trade.
Ironically, odds are high that love trade demand in Chindia is what ultimately drives gold to prices that enthusiastic fear traders only dream about.

imagesSilver just staged a very interesting breakout, from a multi-shouldered inverse head and shoulders bottom pattern.
In the short term, a quick pullback to the $15 area is possible, but the target of the pattern is the $17.25 – $17.50 area, and I think that’s very realistic.

The bottom line is that when system risk dominates the radar screen, top money managers buy T-bonds and gold bullion.
When inflation dominates, they are inclined to focus on gold stocks and silver bullion.

liquid goldGold remains vulnerable now, until Janet takes the rate hike bull by the horns, and takes action.  
A downside breakout would theoretically see gold trade at about $1000. The $950 – $1050 area is massive buy-side support.
If there is a fundamental event that could activate a downside breakout from the symmetrical triangle, it’s probably an implosion of a company like Glencore…