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The Precious Metals sector has broken strongly higher in recent days, with
silver breaking out of its downtrend just yesterday, when the fundamental
reason for this move emerged –the
Fed has let it be known, via the St Louis Fed governor, that they are going
to drop rates soon. This is clearly a panic move triggered by the
stockmarket breaking down below key support – the intention is to head off a
stockmarket crash, but it looks unlikely to succeed because they have much
less room to drop rates than they had back in 2008, however, what they are
likely to succeed in doing is breaking the dollar down into a severe
bearmarket, and a storm is already bearing down on the dollar due to the
accelerating global trend to dedollarize which has been given added urgency
by the US administration’s overt bullying of enemies and allies alike by
means of sanctions, tariffs and in some cases the threat of military action.
This is why gold has been rallying, and this time it does not look like it
will be a false dawn – instead it appears to be the start of a major breakout
drive that will see gold launch out of its gigantic 7-year long base pattern
by breaking out above key resistance at the $1400 level, a development that
we have been anticipating all this year.
We’ll start by looking at the latest action in the dollar index. On its
6-month chart we can see that it has started to drop away hard after making
new highs as recently as a week to 10 days ago. This sharp drop looks like it
may be the start of something more serious, and we know why having looked at
its 2-year chart some days back.
 
It’s worth also looking at the 6-month chart for dollar proxy UUP, the reason
being that this shows trading volume. This chart reveals very heavy volume on
this drop, which is a further indication that we are probably witnessing a
major reversal in the dollar here, after more than a year of wafting higher
despite huge careening deficits, due to the interest rate differential, which
now looks set to vanish or at least diminish.
Now we turn to gold where we see that Smart Money - probably insiders - were
aware of this rate development before it became public knowledge, which is
why gold has spiked higher in recent days as we can see on its latest 6-month
chart below, breaking out of its bullish Falling Wedge pattern on good
volume, with additional positive factors worth noting on this chart being the
strong Accumulation line and the way moving averages have swung into
powerfully bullish alignment. Have we missed it? – well, the past couple of
days maybe,but the crucial point to note here is that is that in the
larger scheme of things this is the start of something much, much bigger, so
anyone getting in here is getting in very near to the start of it.This
will quickly become clear as we review the latest 10-year chart for gold.
On gold’s 10-year chart we see that it has been readying to break out upside
from its gigantic 6-year long Saucer base pattern all year. The strong
resistance towards the upper boundary of this pattern is all too obvious and
most investors and traders are aware of it. What this means is that once it
does succeed in breaking out above it, a lot of investors and speculators are
going to pile in and drive a huge rally, at which point the PM sector will
soar – remember that most surviving mining companies have pared costs to the
bone during the long lean years, so any improvement in the gold (or silver)
price will go straight through to their bottom lines. With the Fed set to cut
rates in a desperate attempt to shore up crumbling stockmarkets, the dollar
could well tank, which means that gold and the PM sector generally – already
set up to break out as we can see here – will take off like a rocket.
What all this means is that silver and silver investments are probably one of
the best investments on Earth right now. Silver investments have been ground
into the dust in the recent past, and while gold has broken out and streaked
higher over the past several days,silver only broke out of its
downtrend just yesterday as we can see on its 6-month chart below, which
means that yesterday has the distinction of being the very first day of a
blistering massive silver bullmarket.Like to get in near to the
start? – well, now’s your chance.
Want some confirmation that silver really is starting a major uptrend? – take
a look at this – the chart for hyper-sensitive and manic – depressive Coeur
Mines shows that it rose a useful 5.6% yesterday, but much more impressive
and important was the huge volume on this move at 17.5 million. This was
Smart Money falling over themselves to establish positions. The stock hasn’t
even broken out the downtrend shown yet, but this is a strong sign that it’s
about to and when it does a powerful uptrend is to be expected. To give you
an idea just how powerful consider this – during the first half of 2016 Coeur
rose 8-fold in 6 months on the back of a strong sector recovery move, but
this was just a move off the bottom, the move that is starting now will
involve gold and silver breaking clear out of their massive 6-year long base
patterns into exceptionally powerful bullmarkets fuelled by systemic collapse
and a trend towards hyperinflation as governments deal with liquidity
problems the only way they know how, by printing money to throw at them to
buy a little more time.
So the period ahead of us is likely to be the most exciting time in
history to be a Precious Metals sector investor and it therefore won’t
surprise you to learn that we will have a marked tendency to focus strongly
on this sector going forward.
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