Wednesday , 22 November 2017


Gold Watch: Several Factors Suggest That 2013 Will Be a Very Good Year

One  of our favorite charts is the oscillator which shows the probability of gold  returning to its mean after a dramatic rise or fall. We believe it helps  investors put the current correction in context with historical moves and  determines potential buying and selling opportunities. [Here’s what the oscillator chart and several other factors are telling us about the prospects for higher prices for gold in 2013.] Words: 539; Charts: 4

So writes Frank Holmes (www.usfunds.com) in edited excerpts from his original article* entitled Light at the End of the Tunnel for Gold.

This article is presented compliments of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Holmes goes on to say, in part:

Reversion to the Mean for Gold Expected

Based on the last 10  years of data, gold seems to be approaching an oversold position after this  latest correction. In standard deviation terms, the percentage change in  year-over-year rolling returns, gold has made a downward move of 1.2 standard  deviations. An event like this only happens about 10 percent of the time, with  high odds favoring a reversion to the mean.

Gold Near a Buy Signal?

Life  is about managing expectations. With gold and gold stocks, there will be  short-term anomalies, such as hedge funds’ liquidation.

Presidential Election Year Cycle Favorable to Gold

Another historical  difference for gold stocks relates to the presidential election year cycle. As  we have mentioned before, gold miners tend to perform poorly in the year of a U.S.  presidential election.

Regardless of which party is in the White House and  which party wants to take it back, going back to 1984, the Philadelphia Stock  Exchange Gold and Silver Index (XAU) has declined an average of 18.4% in  the year Americans are busy thinking about voting for a leader.

XAU GOLD SILVER

It’s not the end of  the world for gold and gold stocks. Take a look at what happens the year  following a U.S.  presidential election: Going back to 1985, the XAU historically has increased  substantially in post-election federal years, rising 23.4%, on average.

philadelphia stock exchange

Continuing Low Interest Rates to Good for Gold

With governments lacking courage for fiscal discipline, I  expect that interest rates will remain in negative territory for a long time.  Central bankers will continue to keep the printing presses warm as policies  aren’t expected to change. I believe this will keep the Fear Trade buying gold  throughout 2013.

Central Banks to Keep Buying Gold

In addition, emerging market central banks have been  diversifying into gold. Net official sector purchases of 425 tons year-to-date  is a drastic difference compared to only a few years ago when central banks  were net sellers of the precious metal. Only recently, UBS reported that in  November, Russia purchased  nearly 3 tons of gold and Brazil  bought almost 15 tons. Iraq—a  notable new buyer—bought 25 tons from August through October. Given that this  is the country’s first increase since the early 2000s, “having a new buyer in  the central bank space and especially from a new region is an important  development,” says UBS.

Visit FinancialArticleSummariesToday.comA site for sore eyes and inquisitive minds!

Love Trade Should Improve in 2013

While the Love Trade has been subdued this year, we see  light at the end of the tunnel, not a train. One recent development is the  increase in mutual fund flows of $32 billion into emerging markets since the  announcement of the third round of quantitative easing (QE) in the U.S.  This appears to be a powerful precursor for a stronger 2013, which would  reignite the Love Trade in China  and India.

Cumulative inflows to emerging market funds

 

*http://www.usfunds.com/media/files/pdfs/investor-alert/-2012-ia/2012-12-21/Investor_Alert_12-21-2012.pdf

Related Articles:

1. Bull Markets Always End With a Bang, Not a Whimper, So Gold’s Run Should Have More Legs

[Here is a summary of my]…thoughts on the 2011 gold price peak relative to the last time a long term bull market ended (back in 1980): Long-term bull markets almost always end with a bang, not a whimper, and last year’s price peak was clearly the latter. A 25% rise over a period of about two months last year [does not an] end-of-cycle, blow-off top [make]. No, I think there’s still some room to run for gold if for no other reason than that we haven’t even come close to the “mania” stage that characterizes the end of long-term market moves…[Let me explain further.] Words: 359; Charts: 1

2. Goldrunner: Gold’s Extremely Bullish Backdrop Setting Stage for Run to $2,050, Then $2,400, Then $4,500 and Ultimately $10,000-12,000!

Our subscription service provides detailed technical analysis of where the price of gold, silver and precious metal stocks are going short term (in the next week or two), intermediate term (within the next 3-6 months) and long term (the ultimate top) in each stage of their respective bull runs. This service comes with detailed charting based on conventional technical analysis and our proprietary fractal analysis based on the ’70s. Below are some of our latest comments and rationale for expected price movements in gold without illustative charts which are only available to subscribers. Words: 1000

3. Gold Projected to Reach $4,000/ozt. Sometime Between Late 2015 & Mid 2017! Here’s My Rationale

I am not predicting a future price of gold or the date that gold will trade at $4,000, but I am making a projection based on rational analysis that indicates a likely time period for gold to trade at $4,000 per troy ounce. Yes, $4,000 gold is completely plausible if you assume the following:

4. Update: 51 Analysts Now Maintain that Gold is Going to $5,500 – $6,500/ozt. in 2015!

Lately analyst after analyst (161 at last count) has been climbing on board the golden wagon with prognostications as to what the parabolic peak price for gold will eventually be. That being said, however, only 51 have been bold enough to include the year in which they think their peak price estimate will occur and they are listed below. Take a look at who is projecting what, by when and why. Words: 644

5. Gold Should Be At $4,666 These Days – Here’s Why

golden dollar

Since the Financial Crisis erupted in 2007, the US Federal Reserve has engaged in dozens of interventions/ bailouts to try and prop up the financial system…and the amount of money printed is absolutely staggering. As a result of this, inflation hedges, particularly Gold, have been soaring…[but] for gold, for example, to hit a new all time high adjusted for inflation, it would have to clear at least $2,193 per ounce. If you go by 1970 dollars (when gold started its last bull market) it would have to hit $4,666 per ounce. Words: 581

6. Alf Field: Gold STILL Targeted to Reach $4,500 – Preceded By Violent Upside Action

We now have a really strong probability that the correction which started at $1913 on 23 August 2011 has been completed both in terms of Elliott waves and also in terms of time elapsed. If this is correct, the gold price should soon be expressing itself in violent upside action as it moves into the third of third wave which is still targeted to reach $4,500. [Let me explain in detail (with charts) how and why my most recent analyses confirm my earlier target of $4,500.] Words: 1085

7.  New Analysis Suggests a Parabolic Rise in Price of Gold to $4,380/ozt.

gold-bars4

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

8. Egon von Greyerz: Gold & Silver Off to the Races – to $4,500+ & $100+ Each – Here’s Why

The closing of the gold window back in August 1971 has led governments worldwide to create endless amounts of worthless paper money and the resulting credit bubble has created a world debt exposure of over US$ 1 quadrillion (including derivatives). It has also created perceived wealth for big parts of the world’s population – a wealth which is only backed by promises to pay and by   grossly inflated assets. Few people realise that this wealth is totally illusory and will implode considerably faster than the time it took to create it.  [Let me explain.] Words: 890

9. Goldrunner: Price Target of $10,000 to $12,000 for Gold Still Holds

gold-bars4

My Fractal Gold chart work is a direct comparison of Gold, today, to the late 70’s Gold Parabola.  Thus, “timing” is taken directly from the late 70’s cycle, with price targets created from a combination of the late 70’s Gold price and different technical analysis techniques.  We developed a price target back in 2006/ 2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull and we still stand by that forecast. Let me explain where we are at this point in time.

10. Nick Barisheff: $10,000 Gold is Coming! Here’s Why

gold-bars4

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

11. Gold’s Recent Price Action Suggests Ultimate Top of $5,000/ozt.

The correlation between the gold price from 1968 until 1979 and from early 2000 until today is an amazing 89.65%! More specifically, the correlation from 1975 until April 1979 and from January 2008 until today is an astonishing 97.83% suggesting that gold will reach an ultimate top of $5,000 per troy ounce before the bubble bursts. Words: 330

12. The Future Price of Gold and the 2% Factor

It is my contention that the price of gold rallies whenever the U.S. dollar’s real short-term interest rate is below 2%, falls whenever the real short rate is above 2%, and holds steady at the equilibrium rate of 2%. Furthermore, for every one percentage point real rates differ from 2%, gold moves by eight times that amount per year. So if the real rates are at 1%, gold will move up at an 8% annualized rate. If real rates are at 0%, then gold will move up at a 16% rate (that’s been about the story for the past decade). Conversely, if the real rate jumps to 3%, then gold will drop at an 8% rate. [Let me explain.] Words: 982

13. Gold Will Reach $3,000/$4,000/$5,000 Before This Bull Market Is Over! Here are 12 Factors Why

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