“QE to infinity” is on the way out, and GDI is in. What is GDI?
It’s “gold demand to infinity”. [Read more...]
“QE to infinity” is on the way out, and GDI is in. What is GDI?
Only Indians can fix what is broken in the gold market, and they are working maniacally to do it. Give India’s gold buyer class the time they need to really fix what is really broken in the gold market, and they will get the job done. [Read more...]
The citizens of a dying empire may need to ask themselves some key questions.
What happens if the death of the American empire is not that important to the price of gold anymore?
What happens if the death of the American empire is becoming… irrelevant?
Internal inflationary forces in the US economy tend to occur during the later stages of an economic upswing. The US central bank believes in an 8 year business cycle, and the last one peaked in 2007. By mid-2014, the current cycle will be very mature, and prone to inflationary pressures. [Read more...]
Three decades of “deflationary rule” may be coming to an end.
Even with that wedge in place, it’s likely going to take some time for the transition from deflation to inflation to occur, mainly because so mainly OTC derivative contracts were marked to “model” during the 2008 – 2009 economic collapse.
As long as quantitative easing is in place, higher T-bond prices are likely to produce higher gold prices, and the long term T-bond chart is currently flashing many technical buy signals. Even if there is a very short term sell-off, I think T-bonds are set to drive gold prices higher, and there will be an upside breakout in gold.
The T-bond chart is bullish enough to suggest that rather than tapering QE, the Fed may soon increase it. [Read more...]
The financial condition of the government of Japan is much worse than most other governments. That means that money printing, in the form of QE, can get out of control much more easily than in other nations. If the current volume of Japanese QE continues for another year or two, or even accelerates, I expect serious inflation to occur.
On that note, I’ve suggested that the price of sugar is perhaps a better lead indicator of a surge in the global inflation rate than gold or silver.
After the oil price shock of 1973, it was sugar, not gold and silver, that suggested that stagflation could occur, and it did.
When sugar makes a big move, up or down, gold and silver often tend to follow. Sugar is currently completing an enormous bullish wedge pattern.
‘ll remind all gold and silver investors that sugar’s last big peak was in early 2011. That was several months before gold and silver peaked, proving sugar’s ability to be a key indicator of gold and silver price action.
The current move in sugar needs to be watched. A short term correction is overdue, but sugar could be indicating that the actions of the Japanese government and central bank are much more of a “game changer” than most investors realize.
At this stage in the super-crisis, rising bond prices are bullish for gold. That should change, but not for several years.
Demand for silver could be even stronger than for gold, and the most recent price action shown by gold’s “little brother” is superb.
As one deadline after another passes, the US government is beginning to shut down. This is a truly horrific situation, and I’m stunned by the incredible complacency being exhibited by stock market investors.
For decades, I’ve labelled the September – October time frame as “crash season”. In my view, it’s critical that all mainstream investors get out of the market during this period, because it’s when the most devastating market meltdowns tend to occur. It can take generations for investors to recover the losses they experience during crash season. The risk of 25% – 90% losses far outweighs the potential reward of 2% – 5% gains.
Today is the first day of October. The crash of 1929 occurred during this month. Can a similar event happen again? Of course it can, and the current atmosphere increases the risk of it occurring. [Read more...]
The gold price continues to decline, albeit modestly. Many gold investors are rightfully frustrated, after watching gold stocks give up all their “no taper” rally gains.
The key issue causing this situation is comex gold options. Gold expiration day was yesterday, September 25.
Gold often tends to decline as options expiry approaches, and I think that is the main short term price driver of gold right now.
In the big picture, Chinese & Indian demand is probably the most powerful driver of higher gold prices. It’s important not to make decisions that affect your long term core positions, using events like “options expiry day”. [Read more...]
Gold is wealth itself. Whether you are bullish or bearish, there are still key price areas on the “grid” that should be bought and sold.
I’m placing risk capital based on a scenario where the Fed announces a dovish taper today, and then gold & silver stocks begin a strong rally. [Read more...]
The upcoming FOMC meeting, press conference, and the taper caper issue are creating modest tension in the gold community, but the gold chart looks very healthy.
If Chairman Bernanke stuns the mainstream money managers by holding off on the “taper caper”, gold could surge violently higher.
Any tapering that does occur is likely to be quite mild, and it’s probably already priced into the gold market now.
I realize that most investors in the gold community probably believe that the June lows near $1180 are a “final” bottom. I think it’s a bit early to make such bold statements.
Regardless, there’s no question that the $1180 area is at or below the cost of production, for many mining companies. Value-oriented investors know that when gold trades in the “COP” (cost of production) zone, both gold and mining stocks should be accumulated, and held with very strong hands.
In silver, there is substantial sell-side HSR in the $26 area, but a developing flag-like pattern suggests that silver could stun the current top callers, and rise to the $30 area.
Core gold positions should never be sold, regardless of your price targets or fundamental scenarios.
Gold is arguably the ultimate asset, so it probably can be viewed as wealth, rather than a tool to get wealth. Key core positions that are accumulated on severe price weakness should be held with an iron hand.
In contrast, trading positions could be “offloaded” at $1411, $1440, $1471, $1523, and $1577.
I have no idea if gold and silver have made an “ultimate bottom” or not, and I really don’t think any wealth is built by getting overly-obsessed with that question.
If gold has bottomed, that’s great news. If it hasn’t, investors can use profits booked now to buy lower prices, with some degree of comfort, rather than selling in terror.
Over the past few days, I’ve been a fairly heavy seller of gold bullion and gold stock trading positions.
The market has showed impressive strength over the past couple of months. Strength must be sold, albeit in moderation.
Silver might be forming a fairly large inverse head and shoulders bottom pattern, but in the shorter term, it’s probably almost time for silver to rest. [Read more...]
There is an FOMC announcement on Wednesday. Then, Barrick Gold Corporation issues its quarterly report on Thursday. On Friday, the US labor department releases the jobs report.
It’s very likely that at least one of those reports creates (or is used as an excuse for) a sharp sell-off in gold. [Read more...]