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In
1980 gold topped out at $850.00. That bull market produced an increase of
+2,276% from start to finish. The current rally in gold began in 2002 at
$260.00 and has thus far risen +582%. By comparison this current bull market
has the potential to rise much further.
In
1980 silver topped out at $50.00 after rising +3,100%. The current bull
market in silver began at +/- 5.00 in 2003. It has thus far risen +600%.
Silver also has the potential to rise much further.
Featured
is the monthly gold chart. The uptrend is well defined within the blue
channel. The supporting indicators A, B and C, are rising as well. Price is
breaking out from beneath the resistance line. The last time this happened
gold rose for almost three years. During that time the price doubled! A
double from here takes gold to $3,500.00!
“The fear of hard times leads to
inflating the money supply and inflating the money supply leads back to hard
times.” …Ayn Rand.
 
This
chart courtesy US Treasury and UBS shows the dramatic shift from US Treasury
bills and bonds to gold bullion, on the part of China. This is a very bullish
fundamental factor that is underpinning gold. “A trend in motion
remains in motion until an outside event comes along to stop it.” China
needs gold as part of its plan to make the Yuan as dominant as the US dollar
has been since 1944.
“Nations are not ruined by one act of
violence, but gradually and almost imperceptibly by the depreciation of their
currency, through excessive quantity”
… Nicolaus Copernicus 1525.
Featured is the
index that measures gold against the 6 currencies that make up the US dollar
index. This trend represents gold in foreign currencies. Notice price is
breaking out at the blue arrow from a large pennant formation. Volume is
confirming the breakout. This confirms that the bull market in gold is not
limited to a lack of confidence in the US dollar. This is a worldwide bull
market where the participants are showing a preference for gold over all fiat
currencies.
“The fear
which fires inflation is the desire to contract debts, and at the same time,
avoid at least partial repayment of those debts: R. J. Rushdoony (from ‘Roots of Inflation’).
Featured
is a 20 year glance at the index that compares crude oil to gold. Expressed
in gold the price of oil (except for fluctuations above and below the
average), is virtually unchanged. If you sold a small gold coin once a week
or once a month, and used the proceeds to buy gasoline for your car, you
would have been paying the same price, on average, for the past twenty years,
and most likely longer than that.
“When governments and their central
banks conspire to expropriate wealth from investors via their inflationary
stealth taxes, the only way to come out ahead in this game, is to always be
invested in whichever market happens to be in a secular bullish trend.” …..Adam Hamilton.
Featured
is a twenty year review of the index that compares crude oil to silver. The
same principle that applies to oil/gold also applies to oil/silver. Does this
reinforce the need to own some gold and silver coins?
Hyperinflation
(inflation at +20%), during my lifetime: Argentina, Austria, Bolivia, Brazil,
China, Croatia, Ecuador, France, Germany, Hungary, Indonesia, Iraq, Italy,
Mexico, Mozambique, Peru, Poland, Romania, Russia, Turkey, Uruguay,
Venezuela, Vietnam, Yugoslavia, Zaire, Zimbabwe. Do still think it
won’t happen here?
Featured
is the weekly silver chart. Price is carving out a large flag. The supporting
indicators are positive (green lines). A breakout at the blue arrow sets up a
target at the green arrow.
“Silver in RFID chips (Radio Frequency
Identification). Next generation RFID chips will feature a tiny antenna which
will increase the range for scanning the chip from 5 meters to 15 meters.
This silver will be in too small an amount to make it economically
recoverable. The number of RFID chips will eventually be in the
billions.” …David Morgan.
The
last time I wrote an article was in January. Gold was trading at $1,622.00.
My outlook was bullish at that time, and it is even more bullish today
because of all the money printing that is going on.
For
your convenience we have updated the home page of www.pdegraaf.com. We now
feature live data for 14 commodities and indexes. Be sure and bookmark the
site for future reference. To refresh the page, click the F5 key on your
keyboard.
Happy
trading!
Peter Degraaf
Pdegaaf.com
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