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1.In an inflationary environment, silver bullion and
junior/intermediate gold stocks tend to outperform gold bullion and senior
gold stocks.
2.Please click here now. That's the daily gold
chart.The price now is well below where it was at the November 2014 lows.
3.Next, please click here now.That's the GDX daily
chart.It's also well below all its recent intermediate trend lows.
4.Please click here now. That's the daily
silver chart.
5.Rather than staging a technical "break down",
silver has essentially been trading sideways, and it has not traded
significantly below than the November lows.
6.From the May highs, silver has drifted lower, whilst
gold fell somewhat violently.
7.This difference in price action is typical when
system risk fades, and inflation begins to dominate precious metals price
discovery.
8.Please click here now.That's the GDXJ daily
chart.While there is a downwards bias in play, the price action really takes
the form of a sideways drift.
9.Given the greater risk profiles of silver and GDXJ,
(versus gold and GDX) it's very positive to see them trading roughly
sideways, while gold and most senior gold stocks tumble lower.
10.This price action suggests a concerning rise in
inflation may be closer than most analysts think it is.
11.Please click here now.That's the US dollar
quarterly bars chart.The dollar has stalled at round number resistance of
100, and it's technically overbought by a number of measures.
12.There are also a number of concerning macro issues
facing America right now.The next debt ceiling vote probably takes place at
the end of September.If the ceiling is raised without serious measures in
place to reduce that debt, rating agencies could issue downgrades of US
government debt.
13.It's not a comfortable situation, and it's
certainly not one that I'm keen to invest in.
14.The September-October time frame is also "stock
market crash season". The worst US stock market crashes in history
have occurred in the months of September and October.
15.This year is a particularly dangerous one, because a
Fed rate hike could occur just as the debt ceiling is being hotly debated by
US congress!
16.With these great fundamental dangers to America in
place now, the idea that gold needs to be sold to avoid lower prices seems rather
bizarre.Are analysts who are vehement about avoiding gold market drawdowns
now. treating gold more as a gambling chip than an asset?Unfortunately, I
think so.
17.Please click here now. That's a snapshot of
Saxo Bank economist Steen Jakobsen being interviewed by CNBC.Obviously he has
serious concerns about the US economy, and about the dollar.
18.As the Chinese economy transitions from an exports
focus to a domestic consumption focus, the need for a weak renminbi
diminishes.The IMF is likely to accept the Chinese currency into its main
reserve basket in October, and that acceptance will probably create significant
forex flows out of the dollar, and into both Chinese stock markets and the
renminbi.
19.In the longer term, Chinese real estate markets are
more likely to suffer than the Chinese stock market.That's where the biggest
shadow banking loans are, and it's likely to put a modest drag on Chinese GDP
growth.It could also lead to a crash in other global real estate markets,
particularly if the US debt ceiling debate gets out of hand.
20.Regardless, retail sales are showing double digit
growth in China, whilst the US is in the seventh year of its business cycle,
and fading.
21.That US cycle is old and reaching the point where it
becomes inflationary, so it's time to invest less in America, and more in
China, India, and gold.
22.On that note, please click here now. That's the daily chart
for INDA-NYSE, the Indian stock market ETF.Like the US stock market, it's
gone essentially sideways in 2015, and it could crash if the US stock market
crashes.
23.I'm more interested in what happens after a crash, and
buying into that crash as it happens, than working maniacally to avoid it.In
the case of America, if there's a stock and bond market crash, I don't really
see much hope of a recovery after that, to meaningfully higher prices.
24.In contrast, in the case of China, India, and gold,
all market declines should be viewed as key price sales that will be
followed by much higher prices.Let me repeat: Inflation tends to rise in
the late stages of the business cycle, and the outperformance of silver and
GDXJ versus gold and GDX speaks volumes about where the United States is now,
in its business cycle.It speaks volumes about where the Western gold
community should be focusing their biggest energies.Avoiding drawdowns is a
game for gamblers, and I have no interest in gambling (with anything other
than gambling money).Please click here now.That's the latest COT
report, and I've highlighted it.This key report clearly shows small investors
and funds trying to avoid drawdowns by selling gold and shorting it into this
decline.It shows banks almost reaching a net long position, much akin to
their actions in the late 1970s.Accumulation with prudence now, is the modus
operandi, of the professional gold investor!
Special Offer For Website Readers:Please send me an Email to freereports4@gracelandupdates.com and I'll send you my free "Golden Harvest" report!I
highlight ten junior and intermediate gold stocks that can be accumulated
now, for "profits harvesting" later in September!
Thanks!
Cheers
st
Stewart Thomson
Graceland Updates
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Stewart Thomson is no longer an investment advisor. The
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