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I have an out of town guest staying with me on Wednesday and Thursday so I will not be writing on Thursday or Friday either, but I will publish on Tuesday!

Have you noticed that the last few days gold is taken down in London only to regain the losses around 10 a.m. in New York?  There obviously is a determined “not for profit” seller that starts the ball rolling and then the hedge funds come in and buy the dip.  So far, every attempt to deflate gold is met with strong buying.

The end result is a flat, boring market, though lately gold is inching up.

Our friend Bill Murphy, LeMetropole Café’s Editor in Chief, often writes that price action creates the interest in gold and silver.  All the Cartel has to do is hold the price in a trading range, as it has been for months now, and all excitement and interest will disappear.  That’s pretty much the way it works, and it is easier to pull this off during the summer months, when interest is at its lowest anyway.

Following the price of gold and silver since May is like watching grass grow or paint dry.  Those of you who follow Ranting Andy Hoffman and Bill Murphy know about the different capping tactics that the Cartel applies to keep the prices from gaining any traction.  Still, I would hate to be “short” gold or silver now.  A whiff of QE3 and it’s off to the races.

The silver chart looks much the same.

Gold has held steady in a trading range between $1635 and $1550 and silver is range bound between $29 and $27, spending most of the last three months below $28.  There is no excitement, nothing pricewise to build momentum on.  Granted, gold looks much more attractive in euro than in dollars, but the rigging is working as intended.

The question then becomes, “when will gold and silver break out of the trading range?”  And – will it break out with a big move up, or a big move down?

Lately, many of the industries brightest minds including James Turk, Eric Sprott, Rick Rule, the Erste group and Jim Sinclair have cast their vote that the move will be up, and it is coming soon.

Check out the following charts from Peter Grant of USAGold.com, showing gold in dollars and in euro.  Gold has already started to breakout to the upside in euro.  In dollars, the trend is still up in the air… but $1600 has been holding firm as support, which is bullish.
Gold – US Dollar Weekly

 Gold – Euro Weekly

Peter Grant, over at USA Gold, recently wrote a special report (Gold Technicals Portend Impending Breakout) on why now is a great time to start accumulating gold.  Here are a few of his reasons:

  • UBS precious metals strategist Edel Tully raised the bank’s 1-month gold forecast to $1,700 early in August, which would surely constitute the anticipated breakout.
  • HSBC recently reiterated their bullish outlook, calling for $1,900 by year-end.
  • John Hathaway of Tocqueville Gold Fund stated in an interview two-weeks ago that he “wouldn’t be surprised” to see gold over $2,000 by year-end.
  • Simon White, head of risk management for Hinde Capital also just wrote a piece entitled Gold Poised for Upside Breakout of Current Range.

 

The Erste Group’s Ronald Stoferle maintained his bullish outlook in the recently released and widely respected In Gold We Trust report, noting that the “best season for gold begins in August.”

Gold is also looking stronger in Australian Dollars, Canadian Dollars, Japanese Yen, British Pounds and Swiss francs.  Or more accurately, fiat currencies are all weakening against gold, The Standard!

The next few months are going to be very interesting and I suspect gold, and it’s little sister Silver, will be anything but boring.  And my guess is the breakout will be to the upside.  In fact, I just bought some more on Thursday.