Saturday , 23 September 2017


Now's Your Time: Take Advantage of Market Trepidation, Act With Uncommon Confidence & Buy (Some) More Gold!

At the end of the day the gold price is not a mystery – it’s a proxy for dollar weakness. After spending the previous fall and winter testing new nominal highs above $1,800, future investors may come to view…2012 as the opportunity of the decade. Gold has shown its strength and retreated. While most investors will take that as a signal that the market has topped, some will take advantage of the general trepidation to add to their positions at hundreds of dollars off the highs. Words: 700

So says Peter Schiff (www.europacmetals.com) in edited excerpts from his original article* entitled Bullion is Now Being Priced for Collapse .

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Schiff goes on to say, in part:

Gold will continue testing the $1,600 barrier until it surprises to the upside spurred by the announcement of QE III, a calming of fears in Europe, or any shock to the Treasury market.

Remember, the key to this market is to understand that the market for US dollars and dollar-denominated debt is headed off a cliff, which will send the price of precious metals soaring. Now is a time for uncommon confidence. [Read: Martin Armstrong Clearly Explains Why the USD is Strong and Gold Weak in This Terrible Economic Environment and U.S. Dollar Index to Plunge; Gold & Silver to Soar! Here’s Why]

Nerves of Tin

Being a gold investor is tough business. The last thing any government or corrupt big bank wants is to have a bunch of people putting their savings into hard assets – and gold is one of the hardest of all – so we’re constantly up against tides of propaganda saying that gold has no value or is the refuge of doomsayers.

The effect of this is that even heavy gold investors are always waiting for the other shoe to drop. When house prices were rising, no one was worried that the market had peaked or prices were unsustainable. No one was asking whether all the thin-walled McMansions going up would actually be worth anything in a generation, but for gold, Wall Street has been shorting it all the way up!

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Nowhere is this pessimism more evident that in gold mining stocks. Rising inflation has driven production costs higher, but the mistaken belief that inflation is contained and Treasuries are a safer haven is keeping a lid on gold prices. As such, many of the major producers have missed their earnings projections, and their share prices have been punished. This has placed a cloud over the entire sector. In fact, the P/E ratios of major gold miners are near record lows. [Below are links to a number of articles suggesting that now is the time to buy gold mining stocks:

Stock prices reflect future earning expectations, and judging by the low P/Es, Wall Street expects future earnings to plummet. This likely reflects their bearish outlook for gold, which is generally viewed as a bubble about to pop….

Chronic Memory Loss

Since most investors do not truly understand gold’s economic role, they assume the 10-year bull market must be a mania, but manias show parabolic growth detached from any fundamental driver. The definition of a mania is the bidding up of an asset quickly and beyond all long-term justification.

Gold, however, has grown steadily in inverse correlation with real interest rates,… [as per the Gibson’s paradox which is outlined in the following articles:

As a reminder, here’s a chart detailing the correlation:

(Click to enlarge)
 

The Opportunity of the Decade

While I think gold is a bargain at $1,900 considering today’s circumstances, the market phobia of a price collapse is allowing us to buy at well under established highs. Now is a time for uncommon confidence.

[Indeed, Schiff is not alone in his prognostications as the following article shows:]

*http://www.resourceinvestor.com/2012/08/02/bullion-is-now-being-priced-for-collapse?ref=hp&page=2 (To access the above article please copy the URL and paste it into your browser.)

Editor’s Note: The above posts may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Related Articles:

1. Low Real Interest Rates = Continued High Prices for Gold – but For How Long?

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Why is it that the demand for gold moves inversely to interest rates – that the higher the rate of interest the lower the demand for gold, the lower the rate of interest the higher the demand for gold? [Let me explain why and what the future seems to hold.] Words: 1053

2. 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

3. Short-term Interest Rates Are Behind the Price Of Gold – Here’s Proof!

Some gold bugs say that this is only the beginning and gold will soon break $2,000, then $5,000 and then $10,000 per ounce but the question is, “How can anyone reasonably calculate what the price of gold is?” For stocks, we have all sorts of ratios. Sure, those ratios can be off . . . but at least they’re something. With gold, we have nothing…. [or more correctly, had nothing, until the development of my very own model for doing just that. Let me explain.] Words: 945

4. What Do Rising Interest Rates Mean for the Price of Gold?

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5. Low Real Interest Rates Say Gold Bull Still Has Legs! Here’s Why

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6. The “80-20 Rule” Suggests Gold Will Reach $8,300/ozt in Spring of 2015!

how-to-value-and-invest-in-gold

The “Pareto principle” – it’s often referred to as the “80-20 rule” – states that 80% of the effects of something come from just 20% of the causes (that is that 80% of people control 20% of the wealth, that 80% of sales come from 20% of your customers, etc.) and a new report by Erste Group, the Austrian investment bank, says this principle can be applied to bull markets as well, including the current bull market in gold, and following this line of thinking, you get an $8,300 price target for gold by the spring of 2015. Words: 285

7. Is Gold About to Go Parabolic to $3,495 in June ’13; $10,899 in Sept. ’14 and Top Out at $32,659 on Jan. 16, 2015?

buy-gold

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

gold-bars4

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9. David Nichols: Expect to See $2,750 – $3,000 Gold By June 2013 – Here’s Why

Gold_intro

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

10. Will Gold Peak at $2,500, $8,890 or $15,000?

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11. Aden Forecast: Bubble Phase in Gold to Begin in 2013 and Possibly Reach…

gold

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buy-gold

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14. Get Positioned: “Gold Rush” Will Cause Gold Stocks to SOAR – Here’s Why

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15. Martin Armstrong Clearly Explains Why the USD is Strong and Gold Weak in This Terrible Economic Environment

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Understanding what we are facing right now is critical to our survival…. [and to do so] we must embrace a global correlation approach to comprehend the true global implication of how capital moves. [Martin Armstrong provides a remarkable explanation of what is going on right now with the U.S. dollar, bond yields and the current price of gold. It would be well worth your time to read and reflect on what he has to say.] Words: 822

16. Currency Collapse Coming: Go Get Gold NOW!

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gold and currencies

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18. Goldrunner: HUI Index Could Go As High As 1000 in 2013! Here’s Why

BULL

The prospects look great for Gold and Silver to move sharply higher into 2013 to mimic the moves made in the 2005/ 2006 period and especially in 1979.  In both cases back then the PM Stock Indices made big runs along with Gold and Silver.  As such, the current HUI looks good for a major bottom to now be in place and to mimic the PM Stock Surrogate chart from the late 70’s. This would see the HUI go as high as the 1000 area in 2013. Let me explain further. Words: 640

19. 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!

Multiple-forms-of-gold-bullion

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

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dollar down drain

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