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1.Gold continues to garner solid global institutional
support, and shows great resiliency on every sell-off against the dollar.
2.Please click here now. Giant bank Credit
Suisse has joined the bullish forecasting fun, by raising their price targets
for both bullion and mining companies.
3.Deep-pocketed funds and banks are embracing the world's
mightiest asset with gusto, and that's apparent in the price charts.
4.Please click here now.Double-click to enlarge
this daily gold chart.After rallying about $250 towards the 2015 highs of
$1307, gold has simply traded sideways in a very orderly fashion.
5.Investors should cast aside fears about "imminent"
and "frightening" price declines, because large banks and
powerful hedge funds move vast amounts of liquidity.They are generally
unwavering now, in their commitment to gold.
6.Gold is likely to grind sideways in a rough $1250 -
$1300 range until the next big upside catalyst arrives to push it towards my
$1350 target.
7.What could that catalyst be?At the top of the list is
another rate hike from Janet Yellen.Her first rate hike caused a massive US
stock market panic, and she's held off on any more hikes since that happened.
8.Unfortunately for US stock market investors, signs of inflation
continue to grow, and I don't think these investors are listening to Janet's
statements with enough care.
9.Janet Yellen has clearly stated that oil's decline
is temporary, and that signs of inflation are appearing.
10.On that note, please click here now. Double-click to
enlarge this daily oil chart.Oil is by far the largest component in most
commodity indexes, and now it's rallying on stronger demand versus supply
metrics.
11.Please click here now. Heavyweight analysts
at Goldman Sachs are raising their price targets, and the tone of their
statements is very positive.
12.Most analysts think the Fed is in a bit of a tight
spot, whereas I'll dare to suggest its power is greater than ever.Here's
why:Before the QE "money ball" existed, rate hikes tempered
inflation and rate cuts helped create it.
13.Now, rate hikes help create inflation by incentivizing
banks to move the money ball into the private fractional reserve banking
system.Potential profit is much higher there than at the Fed.Movement of
the huge money ball puts significant upwards pressure on money velocity and
inflation.
14.At the same time, it puts downwards pressure on the
stock market, and on the ability of the US government to finance its debt.The
bottom line is this: QE created a giant money ball, but it's the exit of
that money ball from the Fed and into the private banking system that will
create significant inflation.
15.The Fed essentially carries a big stick that it can
wave over the heads of the US government and stock market investors, while
anything it does now is positive for the price of gold.This is a true "Have
your cake, and eat it too!" situation for the Western gold community,
for the first time in American history.
16.Please click here now. Double-click to
enlarge this key quarterly bars chart of the CRB index.It's bouncing off
trend line support in the 160 area.The rally is clearly inflationary.
17.For a closer look at the price action, please click here now. Double-click to
enlarge.There's a nice base pattern on this CRB daily chart, which suggests
the rally is only in its infancy.I'm an eager buyer of a number of the
underlying commodities in this index.
18.All fear trade lights appear to be green for gold and
commodities, and now the World Gold Council (WGC) may have just flashed a big
green light for the love trade.Please click here now. The entire gold price
rally in 2016 took place with Indian demand very quiet.If inflation in
the West ticks higher as India joins the buy-side action, a huge
acceleration of the gold price rally is likely to occur.
19.Please click here now. Double-click to
enlarge.GDX is battling resistance in the $26 -$28 area, as shown on this
daily chart.
20.Gold stocks are more volatile than gold, but I've
suggested that gold stock enthusiasts should put the proceeds of any profit
booking into paper gold ETFs and funds like SGOL-NYSE.That keeps investors in
the "bull era game", while chopping risk a bit as GDX
recoils in this resistance zone.
21.Also, the US business cycle is very old now, as is the
American empire itself.If America tumbles into recession and the stock market
crashes, Janet Yellen may decide to announce a gold buy program very similar
to the programs in play in China and Russia.
22.I don't believe there will be a one-time revaluation
of gold like occurred back in the 1930s, but the announcement of even a
modest buy program by the Fed/Treasury could send gold $100 to $200 higher
within minutes of time.
23.Investors who are in gold rather than fiat will do well
in that situation.Also, any downside price action in gold bullion in the
short term is likely to be mild.
24.Please click here now. Double-click to
enlarge this monthly SIL silver stocks ETF chart.SIL is very close to
breaking out of a gigantic bull wedge pattern, and the current hesitation in
the trend line area is very healthy.Any kind of uptick in inflation from
here is going to put silver stocks on the radar screen of powerful money
managers who already are serious buyers of gold stocks. Right now, silver
stock enthusiasts should be eager buyers of any ten percent pullbacks in SIL
and their favourite silver mining stocks!
Thanks!
Cheers
st
Stewart Thomson
Graceland Updates
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Stewart Thomson is a retired Merrill Lynch broker.
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Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor.
The information provided by Stewart and Graceland Updates is for general
information purposes only. Before taking any action on any investment, it is
imperative that you consult with multiple properly licensed, experienced and
qualified investment advisors and get numerous opinions before taking any
action. Your minimum risk on any investment in the world is: 100% loss of all
your money. You may be taking or preparing to take leveraged positions in
investments and not know it, exposing yourself to unlimited risks. This is
highly concerning if you are an investor in any derivatives products. There
is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion
written off officially. The bottom line:
Are You Prepared?
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