Silver has muscled its way back above $32 and gold has its work cut out as it attempts to retake its 200-day moving average at $1,681.08 and then $1,700, but it is moving in the right direction. Platinum and Palladium are also moving up and so are the mining share indexes. The dollar is pulling back to just above 80. The carnage is over, for now, but tomorrow is another day. Volatility (on the downside) is still with us and JPMorgan is always lurking in the background planning its next attack. Just be sure and extend your time horizon till the end of the year and you will not be disappointed.
Should you be buying now, or waiting for a further pullback to the $1,550 level? Well, Jim Sinclair is pretty certain that gold will hold above $1,600 although if it does drop below that number, it won’t be for long and it will rebound strongly. The key numbers for gold are $1,600 on the bottom (Peter Grandich says $1,600 will hold) and $1,764 on the upside. Once $1,764 is retaken, the move up will power up toward $2,011 and all of this should happen yet this year.
Trader David R is looking for the “correction” (blatant manipulation, I say) to continue but over at KingWorldNews, Pierre Lassonde said:
“There’s no cliff here. There’s no need to panic whatsoever. First of all, let’s take a look at where we came from. We came from $250 ten years ago, to $1,600 to $1,700 today. That is a remarkable feat for the gold price.”
“The mania phase is always the last phase of a bull market. I believe we are going to see that. I (also) believe it will mostly be of Chinese origin. Today over 50% of all of the gold sold on a yearly basis is sold in two countries, China and India. This is where it (the mania) will start.
What can we expect? I think we can expect fireworks.”
“What happened, after the FOMC meeting, in the last two days is a replay of what happened at the end of February. Gold got up to $1,800 (at the end of February), (then it was) smashed. (Two days ago) gold got up to $1,700 and it was smashed (again).”
“Now the interesting thing is both times one would expect the gold price would have risen. What happened at the end of February is the ECB had just announced their long-term refinancing operation (LTRO) of 500 billion euros, doubling the 500 billion euros they had done only a few weeks before.
To me it’s just more proof that there are interventions. The other side, the central planners, they are fighting for their lives. They recognize the path they are on is heading toward the edge of a cliff, but they are continuing to try to put together various contrivances in an attempt to keep this system going.”
You can get the full interviews at www.kingworldnews.com
In his weekly update, David Skarica (Gold Stock Adviser) wrote:
From 1982 to 2000, stocks had their day. But since the dawn of the new century, commodities have been king.
And gold is no mere commodity. It’s value is being driven by the fact it’s a storehouse of value — a proven fact for centuries — that is now thriving as fiat currencies like that of the U.S. plummet in value.
As inflation roars, gold shines. And because of shortsighted, dangerous policies regarding currencies across the globe, the day of reckoning will come. Gold at $1,650 an ounce? Try $2,000. Or $3,000. Or $5,000. Or, as I’ve said before and I’ll say again, $10,000 — a number that seems like pure fantasy now but won’t at all once a full-fledged debt crisis strikes the United States.
But, will such a crisis ever happen? Won’t politicians and the Federal Reserve always eke out a way to pull the nation from the precipice? The U.S. can’t plunge into actual insolvency and default, can it? We’re not Greece, after all.
Well, no, the U.S. isn’t Greece. Because in the U.S., the fiscal situation is worse.
The U.S. has debts it simply cannot pay. The “national debt” of $15.5 trillion is only the beginning. Medicare. Medicaid. Social Security. Military spending. Federal pensions. Interest on the ballooning debt.
There will be a point where it all comes due. The choice of the U.S. so far — to try to inflate its way out of it — can only work so long. Creditors expect payment, and all the hands in the government till will scream bloody murder when the day comes their palm comes out empty.
Gold’s great super cycle is being powered by the fact the U.S. is overextended financially and the dollar will lose its status as the world’s reserve currency. It is a cycle that began in 2001, and continues today. It’s why gold has gone from $250 an ounce to over $1,600 an ounce.
Remember, during the first seven years of this gold bull market, from 2001-2008, there was no quantitative easing. There was no financial crisis. But yet, gold rose.
So, that is the reason for this newsletter. We are riding that trend. Of course, for the sake of the U.S. and the global economy, I would actually prefer that the U.S.’s financial picture was strong, that its dollar was stalwart. Because the aftermath of a U.S. debt crisis, where the dollar is stripped of reserve status, won’t be pretty for anyone.
But facts are facts, and so the best we can do as individual investors is position ourselves as ably as we can. Gold and gold stocks can help provide some shelter in the storm.
When you read Greg Smith’s insider critique of Goldman Sachs, in today’s full newsletter, you get an inside look at the Wall Street mentality. Do you really think that these guys play fair? Bill Murphy started calling GS bums and Hannibal Lecter, years ago. The next time gold and silver are taken to the woodshed, think of GS and JPMorgan and the corporate environment that they work in. It’s all about profit; fairness and customer loyalty are not words they understand.
Also featured today in the full newsletter are articles on Iran oil and Egypt turmoil. Although these articles, and the one by Greg Smith, are not straightforward economic articles, they deal with topics that affect our investments and the economy.