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Gold Bubble Popped! PDF Print E-mail
Written by Administrator   
Saturday, 24 September 2011 05:04
This is what you hear after every pull-back!

Look, markets do not go up or down in a straight line, no matter how bullish or bearish they may be. And precious metals are especially volatile. Not every 10-20% retreat is "the end of the bubble". They call this the "wall of worry" in a bull market. People think it's all over after each pull-back, but all this does is shake out the weak hands (unknowledgeable speculators greedily riding a trend and then panicking) and give those with conviction the opportunity to average in again at a temporary low, which is exactly where we're at today. If you're smart, you'll add to your position today because the metals could easily catapult off of this low to all new highs.

The last time I published these charts in my "To the Moon" series was almost four months ago, at which point I predicted almost exactly the events which transpired. Gold and silver both remain precisely on-trend and I don't see that changing anytime soon. Back in June, I was noting that gold was kissing its trend line at $1540. Guess what? After launching all the way to $1900, it's back at the trend line again around $1650.

gold's hyperbolic trajectory

Meanwhile, silver has been playing around in the middle of its very broad range, and despite crashing by 25% this past week, it's still within its exponential trend.

silver's hyperbolic trajectory

All the fundamentals driving gold and silver higher remain intact. The U.S. government agreed to add another $2.4 trillion to the national debt in August and will probably hit the ceiling again by next summer. The Federal Reserve has pledged to keep interest rates at zero percent for two years! Greece has been acknowledged by most world leaders and economic analysts as inevitably declaring bankruptcy, with or without another bailout, and this very well may bring down the majority of European countries and almost certainly dissolve the European Union. China is dealing with high inflation and a crashing economy. The Swiss Franc -- the last nearly honest currency -- is now pegged to the dying Euro. Central banks are now net buyers of gold. And the Fed is probably going to declare QE3 in response to the crashing stock market and rising unemployment. This is not an environment in which gold could suddenly become a bear market!

So where to from here? We just had a pretty substantial correction in gold and silver this past week, to within a breath of the exponential trend lines. I don't think they'll long stay at these levels, but probably bounce right off. Just look at the slope of the exponential trend lines now! Volatility will likely increase from here. I don't see any more long consolidations in our future.

To reiterate my predictions since the beginning of the year: if the trend remains intact, and at this point there is every indication it will, then by November we'll be to $1700 at minimum for gold and end the year near or above $1800. Silver should end above $35. Again, that's at a minimum, which means there's little room to the downside at this point. If we had a move proportional to the 2005-2006 rally or the 2007-2008 rally, we could see gold go to $2200 this year. And given that we've already seen $1900 in August, I think we could very probably breach at least $2000 in a mid-autumn to mid-winter rally. Silver could certainly see its spring highs and maybe reach $60. These possibilities are likely because the metals usually have their strongest months between now and February. It could be different this year and move only modestly to the minimums I've specified along the exponential trend, but I find that unlikely.

It's clear blue skies to the upside, with only the Moon in sight!

I highly recommend signing up for a BullionVault account right now and loading up on as much as you can afford in their Swiss vault. You will probably never ever see gold this cheap again and will kick yourself for not taking advantage of this opportunity.

I've now seen several analysts back up my prediction that we could see a sovereign debt crisis and currency crisis in the United States before the end of 2012, and probably in Europe before that. The best financial protection is precious metals. Silver in a home bolt-down safe and gold in a highly secure foreign vault covers your bases well. After considerable research, I've found BullionVault to be the best and I highly recommend it.

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Last Updated ( Saturday, 24 September 2011 05:49 )
 
Buy gold online - quickly, safely and at low prices
 
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