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Here is a head’s up.  Starting next Monday, we are changing our newsletter format.  Instead of publishing two newsletters a day, mine in the morning and Andy Hoffman’s in the afternoon, we will publish only one newsletter Monday through Friday, and it will be sent to your in box in the morning.  The newsletter will feature a column from David Schectman, Bill Holter and Andy Hoffman.  You can pick who you want to read – or read all three.  The newsletter will be scaled down so it can be read in its entirety in less than ten minutes.  We have all put our heads together and decided that less is more.  We think you will like it.

Adrian Day:  Gold price may have bottomed. Fundamentals positive

Kitco.com, August 12, 2013

Larry Edelson:  15% Surge in GDXJ Indicates Potential Major Bottom

Money and Markets, August 12, 2013

Richard Russell: The public may not know about what’s happening in the bond market, but the big money and the pension funds sure do, and it’s not pretty. Once the public is aware and feeling the losses in the pension funds, there will be enormous pressure on the government to make everything all right, by putting up the needed money. How will the government do it? They’ll do it the easy way — it’s called printing money. Got gold? Speaking of gold, it has formed a sort of misshapen head-and-shoulders bottom pattern, as you can see in the chart, below.

$GOLD 8-9-13

Next is a chart showing the ratio of gold to the Dow. (In ratio charts, a horizontal line would mean they are even.) What we see here are rising bottoms. It wouldn’t surprise me to see gold outpace the Dow for a time. If this ratio breaks out to a new high, the gold bull market will be back again in all its glory.

GLD DIA 8-9-2013

Finally is a P&F chart of the NYSE “Gold Bug’s Index.” This looks to me as though it’s building large base — just more “silent” good news about gold!

Gold Bugs Index NYSE

The golden rule — “He who has the gold, makes the rules.” — old adage

Dow Theory Letters, August 12, 2013

The cries of anger and frustration about the manipulation of gold and silver, under the sanctioned control of JPMorgan and their friends at the Gold Cartel, are growing louder and louder.  I say it really doesn’t matter if JPMorgan is behind the low prices.  In fact, I’m tempted to build a case if that is a GOOD thing.  How could that be?  Here’s why – I can answer the question by asking you a question.  Would you rather pay $50 to $75/oz for silver and $2500 to $3500/oz for gold?  What do you think will happen when JPMorgan steps aside, and starts to buy billions of dollars of precious metals contracts instead of selling them? Since early this year, JPMorgan covered a majority of their “short” positions on Comex and moved over to the long side.  JPMorgan’s history is that they are always on the right side of the trade and the Specs and small funds are on the wrong side.  JPMorgan is now set up to profit handsomely when the prices of gold and silver start to rise.  Their profits will be in the billions of dollars.

When the hedge funds, that are short now, start to cover their losses (or dwindling profits) as gold and silver rise, they turn into buyers and we should see some form of a reverse of the rapid decline since last April.  Unless a powerful “event” sparks the uptrend, it will not be as sharp and fast as the plunge on the way down, but that was set off by a 1200 tonnes sale from the Bank of England.  There won’t be a similar event on the way back up, but one by one, the stops will be hit, as gold and silver burst through their important “moving averages” and that generates a wave of more selling from the technical funds.  It happened in reverse when gold and silver fell.  This is Mother Nature returning to balance.

If you believe that in the long run, owning gold and silver is a good thing, and a necessary thing to own, why would you be upset to buy at these (manipulated) subsidized low prices?  It’s illogical.

For long-term holders and those of you that own gold and silver as “money” or as an “insurance policy.” It’s illogical to say, “Since mid-April, I’ve lost $300/oz. in my gold holding and I’ve lost $10/oz in my silver holdings.  Are you selling today?  If not, then what have you lost?  Nothing!  The price doesn’t matter until you sell!  It only matters if you HAVE to sell now and are forced to take far less than the metals are really worth.  That would be bad and unfortunate timing.  We see so few people selling back at these prices that we know, first hand, that most of our clients still own their precious metals.

Actually, what has happened for the past 12-months is that you have a last-chance to buy CHEAP gold and silver before the bull market resumes.

Do you believe that the Chinese, the Russians and the Indians are foolhardy buyers?  They are buying every ounce in sight, you know.  Why are they ramping UP their purchases now?  They wouldn’t be if they felt gold and silver are too expensive or if they believed it would be smarter to wait for a possible lower price.  It appears that they would rather trade their “dollars” for gold and silver at almost any price, and the lower the price goes the more metals they buy.

Do you really believe that the dollar will retain its “reserve currency” and “petrodollar” status forever?  How can the dollar possibly hold its value under the weight of $85 billion/month of new money creation directly from the Fed’s QE programs?  I’ve written before why the Fed can’t stop QE.  They can talk about cutting back and indeed may at some point try to in a small way, but anything beyond a token reduction is not a viable option.  And if they cut back $5 or $10 or even $15 billion a month, would that be sufficient to support the dollar?  Let’s face the truth; we are acting like one of the banana republics in Latin America in the 90s.

As for gold and silver, the hedge funds and the Gold Cartel have a proven track record of using that type of information as a cover to hit gold and silver and the price could fall, for a brief time, before it turns around and sprints back up.  The move will be measured in the hundreds of dollars, not in the tens of dollars.

Those of you who still say, “I’m not interested now; I’ve lost money for a year now,” are missing the point.  You are letting Wall Street and the Fed influence you to either sell your gold or to stand aside and let THEM buy it all up cheap.  You should feel duped, and foolish – not for buying gold and silver at a higher price, but because you were conned out of buying more at these low prices.   How do you think you will feel after the price starts to rise?  You didn’t take advantage of this real buying opportunity until it passed you by.  Open your eyes and see how much gold that China, India, Russia and the Brics are buying right now.  The beginning of the bull market’s return could be here now – and the three quotes I presented at the beginning of this newsletter agree that the bottom is in!  If it isn’t in, gold’s quick rebound to support at $1330 is impressive.  And silver darts back above $20 is even more impressive. It is not far fetched to suggest that the bottom is in.  We most likely saw it last June.  But first things first – gold at $1400 then $1600 and then we set sight at a new all-time high.  I think we can get there in less than 12 months.

Even Larry, “I told you so” Edelson has come back over to the bullish side.  Gold and silver never did hit the extreme lows he predicted, but he did get the drop in prices right.  I would be very disappointed in Larry if he didn’t get his flock back on board in a timely fashion.  He is softly saying, “It’s time to act now.”  He won’t shout it until gold rises above $1800, but that means you would give up the next $500/oz on the way up.  It’s been a long time to endure this correction – or manipulation, whatever you wish to call it.  It’s been almost two years. But there is light at the end of the tunnel now.  If you still don’t believe me and have doubts, then do nothing; but when silver is $30 and rising (up 33%) and gold is $1500 and rising (25%) give us a call.  We would love to help you jump back on board.