|
1.Good things come to those who wait, because patience is
a virtue.
2.Over the past few days, various Fed presidents and
governors have made both hawkish and dovish statements.The US stock market
and gold stocks have reacted violently to these statements.
3.It's important for all gold stock investors to
understand that anything can happen at next week's critically important FOMC
and BOJ meetings.
4.Ahead of those meetings, it's clearly a time for
patience.Once the meetings have been completed, institutional investors will
begin to apply large amounts of liquidity to the markets, and a new
intermediate trend will be underway.
5.On that note, please click here now.Double-click to enlarge
this daily bars gold chart.I annotated this chart a week ago, predicting a
rally to the trend line in the $1355 area, and then a pullback from there to
$1325.
6.To view what actually occurred, please click here now. Double-click to
enlarge.Gold followed the exact trajectory I predicted.
7.All that's left now is for gold to stage an upside
breakout from the drifting rectangle pattern, and begin the rally to my $1392
and $1432 target zones.
8.That is unlikely to occur until next week's FOMC/BOJ
meetings are completed.
9.Please click here now.Double-click to enlarge
this monthly bars gold chart.Many technicians have noticed this bull wedge
pattern, and they are predicting a kind of parabolic move to begin after an
upside breakout.
10.While that sounds wonderful, these technicians may be
quite disappointed by what actually transpires if there is a "breakout".Please
click here now.Double-click to enlarge
this quarterly bars chart.
11.Upon close inspection, it's clear that gold could
rise to $1432 over the next quarter, and still be contained within the bull
wedge pattern on the quarterly bars chart.
12.Also, there is massive overhead resistance in the
$1492 - $1523 price zone.Gold is extremely well supported by value-oriented
institutional money managers, but most of the price appreciation is coming
from the low relative cost of carry that gold is showcasing against major
fiat currencies.
13.It would take a huge fundamental catalyst like a US
stock market crash, bond market crash, or a geopolitical black swan event to
create a dramatic acceleration in gold's current rate of price appreciation.
14.On that note, please click here now. Double-click to
enlarge this daily bars T-bond chart.Despite the cheerleading speeches given
by some Fed speakers, there is some clear technical damage occurring in the
bond market.
15.Whether that damage is foreshadowing something
bigger or not will only be made clear by what happens at the FOMC/BOJ events.
16.Please click here now. Double-click to
enlarge.This eight hour bars chart of the Dow presents a similar picture; the
US stock market staged a partial recovery from Friday's hammering, but if
Janet Yellen actually does raise rates next week, the stock market may begin
a horrific decline.
17.A rate hike would only increase the relative cost of
holding gold compared to fiat slightly, but it could create massive gold and
yen safe haven buying if the US stock and bond markets crashed.Going into
next week's critically important central bank meetings, it's win-win for gold.
18.Most mainstream economists believe the odds of a
September rate hike are about 30% or lower.Clearly, a shock announcement
from Janet has the potential to create massive stock and bond market carnage.
19.Many investors are perplexed because September is
historically a very good month for gold price appreciation.That's true, but
the February to June period is seasonally week, and gold did well this year.
20.Also, the September strength is caused by Indian
festival buying, and after two years of drought the farmers there have
substantial debts.So, Indian gold demand is muted.
21.Please click here now. Double-click to
enlarge this GDX daily bars chart.The $27.50 - $29 area can be lightly sold,
and the $25 - $26 area can be lightly bought until the central bank meetings
are finished.
22.If there is no rate hike next week, GDX should
challenge the $32 area highs, and lead bullion higher.
23.If there is a rate hike, GDX and most gold stocks will
likely spike lower while bullion soars higher, in a scenario similar to what
happened when Janet hiked in December of 2015.
24.The good news is that after a very brief decline when
Janet hiked last year, gold stocks staged one of the biggest rallies in many
years.If she hikes next week, I expect history to rhyme!
Thanks!
Cheers
St
Stewart Thomson
Graceland Updates
https://www.gracelandupdates.com
https://gracelandjuniors.com
www.guswinger.com
Email:
stewart@gracelandupdates.com
stewart@gracelandjuniors.com
stewart@guswinger.com
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 time.
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?
|
|
