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1.From a
technical, fundamental, and seasonal perspective, the current gold price
correction is exactly what "the golden doctor has ordered".
2.Please
click
here now. Double-click to enlarge this beautiful gold daily chart.
3.Note
the position of the Stochastics oscillator at the bottom of the chart.It's
nearing oversold territory, as the gold price meanders calmly down towards
key support that begins near $1225.
4.The
decline is not violent.It's orderly and calm.I would call the price action idyllic.
5.To
understand why the correction is so mellow, please click
here now. The SPDR fund (GLD-NYSE) tonnage rose again yesterday, to yet
another multi-year high!
6.The
price correction is being met with consistent institutional buying.I've
predicted that gold will transition into an accepted asset for mainstream
money managers.
7.That
will reduce volatility for investors, and an atmosphere of confidence and
happiness will quickly permeate most of the Western gold community.
8.Please
click
here now. Double-click to enlarge this monthly gold chart.As gold
declined towards the key $1228 - $1045 support zone in 2013, I labelled that
zone as a massive buying area for gold investors.
9.Gold
spent about two and a half years in that price area, and then it charged up
towards the first key resistance at $1307 - $1320.
10.From a
purely technical perspective, a pullback towards the $1228 support zone is
absolutely healthy and expected at this point in time.
11.The
SPDR fund tonnage would not be rising, and the price action would not be as
gentle as it is, if major institutions were sellers now.They are buyers, and
as the price drifts towards the $1228 area, I expect them to continue to buy,
and so I expect the price action to continue to be calm and orderly.
12.Commerzbank
reports that ETF holdings rose 19 of the past 20 days, and are up almost 90
tons just since the start of May.
13.Essentially,
the orderly gold price decline is being created by a combination of soft
demand in India versus strong Western buying.
14.Once
the monsoon season arrives in India (in about a month), I expect the gold
price to begin rising again, as buyers there return to the market with size
that is large enough to send shock waves throughout the Western gold
community.
15.Please
click
here now. As robots replace human workers, governments are beginning to
study the merits of a basic income for their citizens.
16.Many
citizens are also clearly advocating the idea, and the idea is likely to
involve a fair amount of money printing.That's good news for gold.
17.It's
still early in the "basic income" game, but I've predicted
that the failure of QE to stimulate inflation will bring government
orchestrated wage inflation and moderate gold revaluation.
18.Please
click
here now.I've also argued that traditional central bank policy can't work
with the current levels of government size and debt.
19.The
influential Barron's business newspaper suggests that the Indian government
may be looking to load the country's central bank with money printers.If that
happens, I expect Indian citizen gold demand to essentially do a "moon
shot".
20.Please
click
here now. Double-click to enlarge this GDX weekly chart.The price action
during this gold stock correction is as orderly as the bullion correction,
and that's very positive.
21.A
light pullback is in play from the $27 area resistance zone.The uptrend line has
been penetrated, but there hasn't been any violent price action on the
downside.
22.It's
important to remember that the gold sector rally caught most analysts in the
gold community by surprise.The buying has come from very strong hands.That
means they will engage in only light profit booking rallies, and buy
aggressively on pullbacks.
23.For
GDX, I'm predicting that enormous institutional buying will appear in the $20
area.
In
the big picture, more governments are trying to turn their central banks into
ATM machines.There are forecasts for bumper crops in India, due to a great
monsoon season.Relentless institutional buying of gold stocks and bullion is
in play.This price correction should be viewed as a spectacular buying
opportunity!
Thanks!
Cheers
st
Stewart
Thomson
Graceland Updates
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