|Our Fractal Model suggests the wave for Gold in US Dollars will sweep up into the $3500 to $3600 area into the mid-year time-frame as presented in a previous article. The leading edge of that time-frame begins in May and extends out for a few months. A potential for Gold to spike to a $3900 extended fib level exists. Like all parabolic moves in Gold, the late stages create the biggest price movements. Personally, I would be happy with a huge Gold run up to the $3200 level. Words: 1400
So says Goldrunner (www.GoldrunnerFractalAnalysis.com) in an article edited for publication and distribution by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!). This paragraph must be included in any article re-posting to avoid copyright infringement.Goldrunner goes on to say, in part:Our description of the Gold tsunami wave to come this year as a result of the huge wave of Dollar Inflation initiated by the $600 Billion US Dollars sent to Europe back in December of 2011 is beginning to be noticed by the markets. This is a very important “point of recognition.”
The fundamentals for this wave in gold are as follows:
1. The massive world debt load demands that we either see a deflationary depression; or that we devalue the debt by devaluing the paper currencies. The politicians have chosen to dramatically devalue the paper currencies.
2. The Federal Reserve is the only Central Bank with the right to print to infinity, thus, US Dollar printing will remain the leader going forward.
3. Gold moves almost directly inverse to the value of the Dollar. Thus, the acceleration of Dollar Devaluation will drive the price of $Gold in its accelerating parabolic climb. (The USD Index has little to do with the “value of the Dollar” as we will soon show via “The Fractal Dollar” in a different writing.)
4. This current leg of Dollar Printing via in the $600 Billion Dollars sent to the European Central Bank in a swap arrangement back in December of 2011 is just the start of this wave with Dollar printing demands to increase the debt ceiling, to cover losses by Fannie and Freddie, to continue to pay extended unemployment insurance benefits, and so on. Yet, the “lowly sum” of $600 Billion of Dollar Printing via QE drove Gold up to the $1920 level, and that much kicked off this round.
5. Debt monetization via QE sends no new Dollars directly into the economy since the newly printed Dollars go directly from Uncle Sam’s hands to cover the item listed, above. Thus, these newly printed Dollars only “replace Dollars” that were never allotted for all of the above items and other responsibilities like the unfunded Social Security Funds and Federal Pensions. As such, the economy is not directly helped by the new Dollar printing. As the economy continues to deteriorate it demands an acceleration of new Dollars to be printed. It’s like a cat chasing its own tail.
6. The US needs to devalue the US Dollar to the point that the debt is devalued to manageable level. The Dollar is devalued against “relatively constant valued Gold”; just like the late 70’s when Gold went parabolic. Unfortunately, the massive amount of Dollar printing this time around could not be done via the loan multiplier system where the new Dollars go directly into the economy. So Dollar creation via direct debt monetization, QE, had to be done after the loan multiplier system was “blown out” in 2007 and 2008.
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7. The talk about “manipulation of the Gold Market” was in reference to the government’s need to prevent Gold from going into “free-rise”, prematurely, before the cycle point the above would have been jeopardized. Now, we are past that point in the cycle, and the government “needs Gold to go parabolic” to devalue the huge debts. The government needs the huge Dollar Devaluation to happen fairly quickly to prevent the economy from completely tanking. This is a “fractal cycle” that periodically repeats through history creating the Gold parabola, and like all fractal cycles there is a “fractal time factor” in play. This cycle does not seek to destroy the US Dollar, but ultimately, to prevent its destruction- though the Dollar will have to be backed by something of value in the end.
8. As the huge Devaluation of the Dollar starts its more aggressive moves, everything denominated in Dollars will be devalued along with it. The ONLY way one will be able to “view” the true extent of Dollar Devaluation will be via the chart of $Gold- the ratio chart of Gold to the US Dollar. Watch the chart of Gold drive to parabolic heights like the late 70’s while the “Dollar Index” trades sideways to down.
9. As the chart of Gold blows dramatically higher, it is will represent what is going on in all parts of your life if your life is denominated in US Dollars. Your pension, your social security benefits, your cash in the bank – they will be losing value in a fairly direct relationship to how the US Dollar is being devalued against Gold. This is why Mr. Jim Sinclair says that “Gold is INSURANCE” during this time period. He is saying that Gold will rise inversely to the amount of Dollar Devaluation that is in progress.
10. After this large run in Gold corrects, the fractal model suggests that Gold will make another run up into the $10,000 to $12,000 territory. We laid out those numbers as the ultimate targets for Gold back in 2007 and 2008 via the fractal work. Numbers for Gold higher than that would suggest the potential for “hyper-inflation.”
THE CURRENT GOLD CHARTS
“They” say that the only thing more bullish than a triangle break-out is a triangle that breaks down, followed by price driving back above the triangle apex. That is precisely what Gold has done in the chart, below. This is exactly what needed to happen for our Gold Fractal Model to play out. We can see on this chart that Gold has already “broken out” over the main downtrend line in blue as it rose above the triangle apex to consolidate above a horizontal line through the apex. There is only minor horizontal resistance left above $1800 with all “angled resistance” in the rear view mirror for Gold.
Per the next Gold chart, the “main” resistance areas left for Gold are horizontal resistance at the old top, then the top of the log channel that lies up around $2100. The Gold Fractal Model suggests that we will see Gold hit zones of angled resistance above that point before the real parabolic rise begins. A successful break through the channel top would send Gold flying, and the coming Dollar Inflation should provide the legs.
We recently showed subscribers an interesting chart formation in the 2005/ 2006 period that appears to be very similar to the Gold chart today. That 2005/ 2006 period is a unique secondary fractal period, but these similarities appear to fall under the title of “price pattern analysis.” We often see chartists pointing to price patterns as “fractal in nature”, but they tend to fall under the heading of “price pattern similarities.” The only other individual that I have seen do true fractal work with historical significant time and price relationships has been Mr. Armstrong with the fractal work he developed off of the DJIA. No doubt, price pattern analysis can be a very effective and powerful tool in the right hands.
The first chart, below, is the 2005/ 2006 Gold chart with two separate and similar price pattern corrections circled in blue. For the 2005 correction, I have circled the RSI and MACD indicators since they also look like practical twins to today. These formations show how Gold dipped back to the top of the moving average ribbon, then dropped a second time a bit deeper into that ribbon. After that, price exploded higher, much like we expect it to do in the coming period. The time relationships for these price patterns are different, but look at the similarities in the TA indicator formations to the following chart for the current time period. In my opinion, an explosion is coming!
The next chart shows the current very similar price and TA patterns that closely match the 2005 Gold chart.
As a final note, this writing is going out after the sharp reaction in Gold and Silver, today, Wednesday. This reaction changes nothing important in terms of the underlying fundamentals at hand, nor the intermediate-term technical picture.
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Short-term volatile moves in Gold, as we have seen over the past few months, do not affect our projections for the future price of Gold based on our fractal (pattern) “model” off the late 70′s Gold Bull. Just as we correctly projected the $1,920 high in our April article entitled Goldrunner: Gold on track to Reach $1860 to $,920 by Mid-year (gold reached $1,917.20 in late August and $1,923.70 in early September, 2011), our current analysis indicates that Gold will enter a range between $3,000 and $3,500 by mid-year 2012. Words: 975
According to a recent Elliott Wave theory analysis gold is about to go parabolic reaching $3,495 in June 2013, $6,233 in April 2014, $10,899 in Sept. 2014, $18,712 in December 2014 and culminating in a parabolic peak price of $31,672 on January 16th, 2015! See the chart below. Words: 600
There is a strong probability that the correction in the price of gold [down to $1,523] has been completed. The up move just starting should be…the longest and strongest portion of the bull market…at least a 200% gain… [to] a price over $4,500. The largest corrections on the way to this target, of which there should be two, should be in the 12% to 14% range. [Let me explain how I came to the above conclusions.] Words: 760
151 analysts maintain that gold will eventually reach a parabolic peak price of at least $3,000/ozt. before the bubble bursts of which 101 see gold reaching at least $5,000/ozt., 17 predict a parabolic peak price of as much as $10,000 per troy ounce and a further 13 are on record as saying gold could go even higher than that. Take a look here at who is projecting what, by when and why. Words: 844
When considering that the conditions which propelled gold and silver to their 1980 highs are much worse today, I predict both metals will easily eclipse those previous highs. That means $2,500 gold and $150 silver at the very minimum, but more likely a parabolic ascent to $8,890 gold and $517 silver before all is said and done. Words: 1063
According to my 2000 calculations, if interest rates and inflation stay constant over the next 2 years, we could expect to see (with 95.2% certainty) a parabolic peak price for gold of $4,380 per troy ounce by then! Let me explain what assumptions I made and the methods I undertook to arrive at that number and you can decide just how realistic it is. Words: 740
The current volatility in the precious metals market doesn’t necessarily indicate a change in secular direction. [In fact,] if today’s gold price was to rise by the same degree over the next 14 months [as it did from the beginning of 1979 into 1980, it would hit $4294/ozt. by Jan 2013! Let me explain.] Words: 420
Gold is operating on a smaller Contracting Fibonacci Spiral Cycle that is in synch with the larger Contracting Fibonacci Spiral the markets are in. Adding together the sum of parts… the price of gold will move up in price in 2013, 2016, 2018, 2019 and 2020, with each subsequent leg moving less in percentage terms than the prior move. Gold advanced 4 foldish from 1999 until 2008 ($252/ounce to $1046/ounce) suggesting that gold should top out below $4000/troy ounce by the end of January, 2013…[on its way] to $7,000 and $10,000 per troy ounce by 2020. [Let me explain.] Words: 834
This is not a typical bull market. Gold is not rising in value, but instead, currencies are losing purchasing power against gold and, therefore, gold can rise as high as currencies can fall. Since currencies are falling because of increasing debt, gold can rise as high as government debt can grow. Based on official estimates, America’s debt is projected to reach $23 trillion in 2015 and, if its correlation with the price of gold remains the same, the indicated gold price would be $2,600 per ounce. However, if history is any example, it’s a safe bet that government expenditure estimates will be greatly exceeded, and [this] rising debt will cause the price of gold to rise to $10,000…over the next five years. (Let me explain further.] Words: 1767
From questions whether gold is in a bubble to predictions that soaring prices are just around the corner, one thing is clear: a new phase of awareness for gold is upon us. How far might it move before these troubling times are over? [Let’s take a close look at a variety of factors and scenarios before coming to a conclusion.] Words: 5717
I believe that the price of gold will… reach… $3,000, $4,000, and even $5,000 [per troy] ounce…during the course of this long-lasting bull market, a bull market that still has years of life left to it…[although] prices will remain extremely volatile – with big swings both up and down along a rising trend…The future price of gold is a function of past and prospective world economic, demographic, and political developments [and in this article] I review some of these developments and trends – so that you can come to your own “golden” conclusions. Words: 3800
All you gold bugs out there (and budding gold bugs too!) should find this article of extreme interest. With gold about to make a major move upwards in price NOW is the time to position your gold-investment allocation to maximize your dollars deployed and returns generated. Those in the know will not be investing in physical or paper gold, or even the stocks of the miners, but in the long-term warrants of the very few mining companies that offer such an opportunity. This article provides a primer on the MAJOR advantage that long-term warrants have in a market upleg and identify the specific warrants that are available. Words: 1037
Whatever their reasons, the number of investors wanting exposure to gold is increasing. Many who ignored it a decade ago are now buying. Those who started buying, say, five years ago, continue purchasing it today in spite of paying twice what they paid then. Slowly but surely, it’s becoming more important to more people…but what happens when it becomes a must-own asset to a substantial majority instead of a small minority? Sure, the price will rise, probably parabolically, but putting aside speculation on the price of gold for now, have you thought about what happens if you have trouble finding any actual, physical gold to buy? [Let’s explore that possibility and what that would mean for gold stocks in such an eventuality.] Words: 870
The interim peaks in gold have been spaced 21 months apart over the past 6 years and have seen gains from 80.2% to 97.3%. As such, given the fact that the low of this last correction came in at $1,524 four months ago, we can expect gold to reach a new peak price of $2,750 to $3,000 in 17 months time (i.e. June/July 2013). [Let me explain in more detail.] Words: 976
The Fed is [going to] keep interest rates at zero until the end of 2014 [and that] is as aggressive as it gets and as bullish as it gets for gold. Inflation will be let out of the bag, maybe for the next three to four years. In this environment gold and silver are the best investments around…We are really talking about the next leg higher in this bull market…This is the leg I expect to take gold to $3,000 before the end of 2012.
That governments will want – and will NEED – much, much higher gold and silver prices in the future is counter intuitive, given that they have done everything within their power to throttle back and to keep a lid on bullion prices. Let me explain why. Words: 1300
Historically, the average P/E ratio of the S&P 500 is 16.64, and a reversion to said mean would represent a further decline in the index of 33%.