Gold is setting up a new bottom where I
peg at $1550 and its next test of a new high will be $2000 by June July or
later this year. It depends on the outcome of the US fiscal mess and the budget
We also feel that the US and world stock
markets are threatening to crash which obviously is highly deflationary.
However making a bet, I believe the
markets will not be permitted to crash. Therefore gold has a
likelihood of hitting $2000 this year, or at least testing this and over
the $1800 former high.
I estimate this a
Obviously, if the markets crash hard, then
all the resource stocks crash too for a time. Gold would crash most likely for
a time too. As would silver (I talk about gold all the time but silver is
included to me so keep that in mind).
I suspect that the US will come up with
some ridiculous compromise and the US stocks will at least be stable or even
rally. This is gold bullish.
The outcome of the US fiscal sequestration the way I say here is 55%.
If US sequestration fails, I mean the
avoidance of it, the chances of a major US and world stock crash in the months
between now and July are 70 pct.
Overall the world has decided to make the
central banks the guarantors of all markets for some reason. Why I can’t say.
But according to my tracking of public reports, the world central banks have
put out an incredible $35 trillion backing up markets of all sorts since
2007/8. Much of this was currency swaps between the US Fed and the ECB to
support the Euro.
They have invested so much into this
effort that I cannot help but think this must continue. So my gold prediction
here is not hard for me.