1.America was built by “citizen champions”.Should the current
gold price action be described in a similar way, as a “rally of champions”?I
think so.
2.Technically, gold is arguably overbought.It may be due for a correction
according to cycle analysis, and yet the world’s mightiest metal just
keeps moving relentlessly higher.
3.Please click
here now.That’s a snapshot of the SPDR fund tonnage.Solid buying has
boosted the holdings to more than 820 tons.
4.Also, a potential “rally accelerant” has suddenly manifested
itself, in the form of an end to the Indian jeweller strike.Please click
here now.Double-click to enlarge this key four hour bars gold chart.
5.It could be persuasively argued that gold has essentially traded
sideways because of the strike.
6.Now that the strike is over, demand appears to be rising in the world’s
most important gold market, and gold is rising up nicely, from a small
inverse head and shoulders bottom pattern.
7.My $1320 area target remains within reach on this rally.In the big
picture, I think that as bullish as Janet Yelllen’s first rate hike was for
gold, her next one could turn the gold price rally into a serious “barnburner”!
8.Please click
here now.Double-click to enlarge.This eight hour bars chart of the dollar
versus the yen has ominous implications for the dollar.
9.A bear flag is in play.In the big picture, it’s almost impossible for
gold to experience a major setback, when the dollar is tumbling against the
yen.Please click
here now. Double-click to enlarge.That’s a longer term chart of the
dollar versus the yen, using daily bars.
10.An enormous top pattern is now in play, and dollar rallies are quite
frankly best described as “pathetic”.
11.A breakdown from the current 111 – 115 range could unleash a new wave
of dollar selling, yen buying, and gold/silver buying.That could easily push
gold towards my $1320 target, and leave the dollar wallowing in the 105 -107
zone on the dollar-yen chart.
12.If a much bigger leg of the gold price lies ahead, silver will begin to
dramatically outperform gold.Is there any evidence that such an event is on
the horizon?Yes, there is!
13.Please click
here now.Double-click to enlarge.That’s a daily bars chart for silver, and
to say it looks inviting is arguably the understatement of the year.
14.There’s a beautiful inverse head and shoulders bottom pattern in play,
with a technical target of $17.50 - $18.
15.Silver price enthusiasts should note that India is a massive silver
buyer, so the end of the jeweller strike there could have an enormous impact
on silver demand.
16.Silver is not just the poor man’s gold.In my professional opinion, it’s
the world’s second mightiest asset, and it should be part of all investment
portfolios.
17.If an investor owns no silver at all, they can pay any price for a
small amount of it.After that, they can use my unique “pyramid generator”
for systematic capital allocation.
18.For another view of the silver price action, please click
here now.Double-click to enlarge.This weekly bars silver chart is
extremely interesting.Here’s why:
19.There’s a major trend line breakout in play, and the inverse H&S
bottom pattern on the daily chart appears to be acting as a kind of “Launchpad”
for the weekly chart breakout.
20.Note the beautiful position of both the RSI indicator at the top of the
chart, and the 14,3,3 Stochastics series at the bottom of the chart.
21.Major breakouts tend to have this kind of “textbook” technical
set-up, with RSI on the weekly chart well below the overbought zone, and the
Stochastics oscillator staging a “flatline” event in an overbought
condition.Once the $18 target has been acquired, I think silver will pause,
and then move towards $25.
22.Silver price fans should also look at the SIL-NYSE silver stocks ETF, which
is poised to lead bullion to more upside gains.
23.Please click
here now.Double-click to enlarge.GDX continues to make superb upside
progress towards my $23 target, on this weekly bars chart.Investors who may
have become demoralized and sold their gold stocks at losses should not wait
for any type of correction to get back into this powerful market.Here’s why:
24.Rather than selling off from the $23 area, GDX could instead form a
high right shoulder, far above the $23 area.This is exactly what the silver
bullion chart action is implying is going to happen!It’s clearly a glorious
time for the Western gold community, and I’m becoming quite convinced that’s
it’s about to become… even more glorious!
Thanks!
Cheers
st
Stewart Thomson
Graceland Updates
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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the
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Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor. The information
provided by Stewart and Graceland Updates is for general information purposes
only. Before taking any action on any investment, it is imperative that you
consult with multiple properly licensed, experienced and qualified investment
advisors and get numerous opinions before taking any action. Your minimum
risk on any investment in the world is: 100% loss of all your money. You may
be taking or preparing to take leveraged positions in investments and not
know it, exposing yourself to unlimited risks. This is highly concerning if
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The bottom line:
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