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1.The US jobs report is scheduled for release at about
8:30AM on Friday.As I�ve noted many times, gold has a rough general tendency
to trade lower in the days before that report is released.
2.When the report is released, gold tends to trade
wildly.In the days following the report, gold has a general tendency to move
higher.
3.Please click here now. Double-click to
enlarge this eight hour bars gold chart.On cue, gold is drifting lower ahead
of this jobs report.
4.I realize that many investors in the gold community are
wondering why gold is soft during what is usually a strong seasonal period.
5.It�s important to understand what creates the seasonal
price action.The Indian love trade is the major factor, and Indian farmers
are the main buyers.They are very averse to debt, like the Western gold
community is.
6.These farmers are coming off back to back years of
serious drought and low crop yields.This year�s crop is good, but the farmers
are focusing on paying back their substantial debts that accumulated over the
previous two years.
7.The bottom line is that Indian love trade demand is not
likely to return to normal until 2017.
8.Gold is well-supported by the love trade, but it�s not
the main price driver right now, and gold does face light headwinds in
addition to the demand weakness in India and the US jobs report.
9.On that note, please click here now. Double-click to
enlarge.The price action for the dollar versus gold is highly correlated to
the dollar�s action against the Japanese yen.
10.Unfortunately, this daily bars chart shows a potential
upside breakout for the dollar against the yen.Given the massive decline in
the dollar over the past year against both the yen and gold, a rally is to be
expected at some point.
11.As I�ve mentioned, gold is very well supported though,
mainly by what I refer to as the �competitive cost of carry�
trade.FOREX money managers view gold as a competitive currency.They are
buyers, but not because gold is about to rise dramatically.
12.They simply like gold as a competitive currency.
13.Please click here now. Double-click to
enlarge this eight hour bars T-bond chart.
14.The T-bond has been drifting lower since early July,
and so has gold.That�s not a coincidence, and it�s another modest headwind
for gold.
15.If Janet Yellen had raised interest rates aggressively
this year, it would have incentivized banks to move the enormous QE �money
ball� out of the Fed, and into the fractional reserve banking system.
16.That would have created significant inflationary
pressures, and gold would benefit.Instead, Janet has yet to do anything, and
so the main price driver for gold continues to be the cost of carry factor,
rather than inflation.
17.A drift downwards in T-bonds raises the cost of carry
for gold, without affecting the money ball sitting at the Fed.That means gold
could continue to trade in this sideways drift with a downwards bias until
Chinese New Year buying begins in December.
18.Empires are born, and empires die.Right now, the
American empire is dying, and the empires of China and India are being
born.The death of the American empire is not caused by debt or even
demographics.It�s caused by time.
19.There�s a time to live, and a time to die, and it�s
the American empire�s time to die.Insane levels of debt and entitlements do
appear as an empire reaches the end of its life, but reducing those debts
and entitlements doesn�t change the fact that it�s time to die.
20.The 2008 super-crisis involved limited deleveraging,
and massive transfer of leveraged assets from the private sector to the
public sector (central banks).The next crisis will be a full deleveraging
event that involves both public and private assets.I call it the �End Game�.
21.As it unfolds I expect markets to act more like they
did in 1929 than 2008, and end with gold revaluation.The 1930s gold
revaluation was really a revaluation of US government gold, and a devaluation
of the American citizen.This revaluation will be best described as a
revaluation of the gold held by Chindian citizens, and a massive devaluation
of the citizens of the Western world.
22.Business cycles tend to last about eight years.The
current up cycle is long in the tooth, and as it ends, the end game winds
will begin to blow. Opportunities for gold to stage a parabolic price advance
only occur about once every eight years, and the next opportunity is coming
soon.
23.In the meantime, the general theme of transition from
deflation to inflation continues.Please click here now. Double-click to
enlarge this daily bars GDX chart. Like gold, gold stocks are well-supported
here, but likely to drift a little lower for a month or two.The $22 area
for GDX is a key buying area.
24.Please click here now. Double-click to
enlarge this important oil chart.Oil is by far the most significant component
of most commodity indexes.The OPEC deal is just another indication that oil
is poised to begin a major move higher in 2017.This will bring new
inflationary pressures to the entire world, and a new wave of
inflation-oriented gold stock buying, from the world�s mightiest
institutional investors!
Thanks!
Cheers
St
Stewart Thomson
Graceland Updates
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Written between 4am-7am.5-6 issues per week.Emailed at
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Stewart Thomson is a retired Merrill Lynch broker. Stewart
writes the Graceland Updates daily between 4am-7am. They are sent out around
8am-9am. The newsletter is attractively priced and the format is a unique
numbered point form.Giving clarity of each point and saving valuable reading
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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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