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“The future ain’t
what it used to be.” …..Yogi Berra.
This weekly chart courtesy
Stockcharts.com features the gold price rising within the blue channel and
the Accumulation/Distribution line at the top. The green boxes show the
historical connection between the gold price and the A/D line. Whenever the
A/D line rises (as now), price usually follows. The fact that the A/D line
has been moving up since the beginning of 2012 puts pressure on the gold
price to ‘get in step’.
“There can be no other criterion,
no other standard than gold.
Yes, gold which never changes, which can be turned into ingots
bars, coins, which has no nationality and which is eternally and
universally accepted as the unalterable fiduciary value par excellence”
…Charles Degaulle
This chart courtesy Dimitri Speck. It shows the seasonal tendencies for gold
based on data going back to 1982. Quite often the gold price produces a low
in June and rises from then into February.
"The budget should be balanced, the
Treasury should be refilled, public debt should be reduced, the arrogance of
officialdom should be tempered and controlled, and the assistance to foreign
lands should be curtailed lest Rome become bankrupt. People must again learn
to work, instead of living on public assistance."…. CICERO – 55 BC
Featured is the Bullish Percentage Index
based on the Gold Miners Index ($GDM at Stockcharts),
with the gold price at the top. Historically whenever this index turns up
from below ‘30’, it is matched by a rise in the price of gold
that lasts several months.
 
This pie chart is courtesy Bullion
Management Group Inc. It shows shows gold to be a
tiny part of the world’s investment holdings. The potential for
investors to switch from other investment vehicles into gold is tremendous.
This chart courtesy Goldswitzerland.com
shows the Dow Jones Industrial Average expressed in ‘real money –
gold.’
“The real cost of the state is the
prosperity we do not see, the jobs that don't exist, the technologies to
which we do not have access, the businesses that do not come into existence,
and the bright future that is stolen from us. The state has looted us just as
surely as a robber who enters our home at night and steals all that we
love.”….Frederic Bastiat.
Featured is the weekly silver chart
courtesy Stockcharts.com. Silver is noted for the large pennants that are produced
time after time. One such pennant is being carved out at the present time. At
the top of the chart is the Accumulation/Distribution (A/D) line.
Historically whenever the A/D line rises, it pulls price up with it. For the
past few months the A/D line has risen and silver has not yet followed.
Unless one expects the A/D line to decline rapidly (no sign of that), there
is now strong pressure on price to ‘get in step’.
During the 1960’s at the time when
silver was removed from circulating coinage, the amount of silver stockpiled
around the world was about 6.5 billion ounces. In 1980 the stockpiles of
silver bullion were estimated at 2.5 billion ounces. Since then an estimated
13 billion ounces have been mined, while an estimated 15 billion ounces have
been used up. Silver in most industrial applications is not yet valuable
enough to be recovered for recycling. For decades the amount of silver that
is mined has failed to meet the demand for silver. In the meantime the uses
for silver continue to expand. Today, if just one billionaire decided to buy
1 billion dollars worth of silver, he would have a
hard time getting his order filled. In the process this order would cause a
massive price increase.
This chart courtesy Cotpricecharts.com
shows the ‘net short’ position of commercial silver traders is at
its lowest (14,000 compared to 15,000 last week), since December 2011. Silver
was trading at 27.86 at that time, and during the following two months the
price rose to 35.14.
Summary: In the history of civilization,
there is not one country that escaped the destruction of its fiat currency,
once monetary inflation became part of the process …..Not one!”
Fundamentals are supporting the current
bull market in the metals, as central banks are adding to the money supply at
double digit rates. The technical indicators along with seasonal indicators
are pointing to a resumption of the bull market, now that the correction that
began in September 2011 has pretty well run its course. In the words of W.D.
Gann “when time is up, price will reverse.”
Peter Degraaf
Pdegaaf.com
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