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1.The FOMC minutes release tomorrow should bring some
short term weakness to global gold prices, but I expect many individual gold
and silver stocks to continue their strong rallies.
2.Please click here now. That's the daily gold
chart.After bursting upside from a small symmetrical triangle pattern, gold
has rallied to about $1122.
3.The 14,7,7 series Stochastics oscillator is overbought
now.Gold enthusiasts should cheer for higher prices, but be open to the
possibility that a small and sharp correction could start now.
4.A pullback to the triangle apex in the $1090 area is
not just possible but likely, but the longer term charts suggest gold
has started a major upside rally.
5.Please click here now. That's the weekly gold
chart.In the big picture, gold has essentially been in a drifting rectangular
pattern, with a slight downside bias.
6.Note the superb position of the 14,3,3 series
Stochastics oscillator.Sizable rallies ($150 - $250) often follow set-ups
like the one that is currently in play.
7.While FOMC-linked short term weakness is likely, the
August - December time frame is typically gold's strongest part of the
year, particularly if the monsoon rains in India are good.
8.They have been excellent.As a result, farmers appear
set to buy sizable amounts of gold in the coming months.
9.During gold's strong season, Indians can buy as much
gold as all the world's investors now hold in the SPDR gold fund.
10.Most gold community analysts think higher interest
rates are negative for gold prices.I strongly disagree, and so do many of the
world's top bank economists.
11.On that note, please click here now. Clearly, Commerzbank
bank's Carsten Fritsche shares my view on gold and rate hikes.
12.I believe the Fed is very concerned about Western
government spending, particularly in America.Rate hikes lower T-bond
prices.They force institutions to move liquidity flows away from the public
sector, and into the private sector.Money parked in T-bonds and wasted
in government entitlement programs does not boost money velocity, which is
required to boost GDP.I think Janet is preparing to pull the plug on the US
government's multi-decade "spending gone wild" mindset, and
she'll do it with rate hikes.
13.Higher rates also give banks tremendous incentive to
make more loans.Those loans can significantly boost bank profits, and
strengthen the financial system (slightly).For gold investors, the great
news is that the loans can reverse declining money supply velocity, and raise
the rate of inflation.
14.I think Janet Yellen should raise rates in September,
but whether she hikes in September or December doesn't really matter.Also,
please click here now.India's Prime Minister
wants the UAE to invest USD $1 trillion into India.The UAE wants India to cut
the gold duties, and a cut looks more and more likely in the coming
months.In addition, Shanghai appears to be ready to launch a gold fix by
the end of the year.These three key "traffic lights" for
gold (US rate hikes, Indian duties, Shanghai gold market infrastructure) seem
ready to turn bright green!
15.Please click here now.That's the daily silver
chart.Rate hikes that ramp up money supply velocity could be one of
game changers that silver investors have been patiently waiting for.
16.A decent inverse head & shoulders pattern is
forming, and a rate hike would likely be the catalyst to activate an upside
breakout.
17.Please click here now.That's the GDX daily
chart.It's not as overbought as the gold and silver bullion charts.There's
room for the rally continue, even if bullion swoons a bit.
18.Please click here now. That's the GDX weekly
chart.Note the "epic" rise in trading volume that has
occurred since July of 2013.
19.The 14,3,3 series Stochastics oscillator has crossed
to a buy signal, and has yet to rise above the 20 line.That implies
tremendous potential for higher prices.
20.Since gold stocks began declining in 2011, I've used
my unique pyramid generator to systematically and methodically double my
overall gold stocks position, both for myself and the funds I manage.
21.In contrast, most gold stock fund managers have
liquidated massive amounts of stock over the past two years.They may have
given bullish forecasts and tried to keep a stiff upper lip, but their
liquidity flows tell a horrific story of liquidation and capitulation.
22.Their selling probably magnified the decline.
23.As with bullion, the overall GDX price action since
2013 has taken the form of a drifting rectangle.This has been
accompanied, ironically, by what I consider to be very emotionally charged
statements from gold stock analysts.Predictions for wildly higher and dramatically
lower prices have not played out.
24.That's because gold is an asset in "flux".US
financial system risk is declining (but not gone).Deflation is ending, and
inflationary road signs are clearly appearing.Rate hikes, a duty cut in
India, and a Chinese gold fix are imminent.The downside bias of the drifting
rectangle in gold, silver, and related stocks is ending, because the
fundamental drivers of it are changing quite dramatically.All hands now
need to be on the accumulation deck, of the good ship called.. gold!
Special Offer For Website Readers:Please send me an Email to freereports4@gracelandupdates.com and I'll send you my free "GDXJ Hot Rods!" report.I
cover ten of the hottest GDXJ component stocks, with key buy and sell points
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tomorrow!
Thanks!
Cheers
st
Stewart Thomson
Graceland Updates
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