With the present major correction in gold, silver and the mining sector it is important to look at the big picture and see what the charts are saying from a technical fractal relationship with what happened back in 1979 when the last truely major bull run occurred. To date the situation is, frankly, no different than it was back then unfolding just as it should. As a result we can expect MAJOR upward price action in physical gold and silver and in their mining (producers, developers, explorers and royalty streamers alike) in the next few months on their way to their respective parabolic peaks in the years ahead. Read on. Words: 1604
Those are the views of Goldrunner (www.GoldrunnerFractalAnalysis.com) as conveyed in his original article (see original version here). Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has severely edited the article below 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.
Goldrunner goes on to say:
I spell out just how high the parabolic peak will be and about when all of this will occur in my subscription service (see here for details) but below is a review of my short-term expectations going into 2012.
A major bottom for the PM stock indices is now firmly in place… Price and the technical indicator readings continue to track the 1970’s PM stocks up into new highs with much higher prices to go. We have reached the point in the cycle where leverage returns to the PM stocks with a vengeance exactly like the late 1970s charts.
Our expectation are that a “high level consolidation” for Gold will be enough to start the momentum break-out and run for the PM stock indices and this is happening at the current time. That expectation was based upon the fact that the price of Gold [even with the current price correction] is now much higher than the cost of production for the Gold producers and…caused a [significant] increase in their earnings [which should have a major positive impact on]…the PM stock indices [which] are dominated by large cap gold producers. In fact, we expect this run to be the first, and smallest, of 3 momentum runs to come for the PM stock indices. The mid-900s appear to be a realistic target for the HUI Index…into early 2012.
We will eventually see one of the biggest momentum runs for Gold in history that mimics the 70’s Gold charts that we have provided for our subscribers (see here for subscription details) because the fundamentals for Gold are off the charts on a world-wide basis at this time…[Frankly,] it just doesn’t get any better than this since it appears that we have finally reached the early part of the “cycle sweet spot” for investing in the PM stocks per the 70’s Charts. As we have noted, we expect the large cap Gold producers to out-perform along with the mid-tier producers and near-producers. The usual sub-sector rotations will eventually begin as we saw back in the fractal period 2002. The large cap Gold stocks and the producing, or near-producing, mid-tier Gold stocks, should lead the way for this momentum leg higher.
Silver will lag Gold to some extent in this time-frame since we have already seen the analogous first parabolic leg up in Silver. Nevertheless, we expect to see Silver run back to new highs in a similar multiple topping process as we have shown in the fractal charts for Silver in 1979 and in 2006. Thus, we retain the $52 to $56 price objectives for Silver in that multiple topping process with the potential for Silver to spike up into the low 60s as put forth in our article entitled Goldrunner: The “GOLDEN PARABOLA” & “SILVER ROCKET” Update article posted last week on this site and here (1) as well.
There is a good possibility that we will need to raise our targets for Gold for this momentum run as put forth in our article entitled Goldrunner: The “GOLDEN PARABOLA” & “SILVER ROCKET” Update article posted last week on this site and here (1) as well, but we will wait to see how the next run upward in Gold to the expected $2250 level plays out to see the price structure in comparison to the 1970s…
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- The mid-900s appear to be a realistic target for the HUI Index in early 2012.
- $52 to $56 should be achievable for silver, with $58 to $62 as real possibilities.
- The next run upward in Gold suggests the $2250 level followed by $2500 with the potential for $3,000, or a bit higher, now on the radar screen.
Titles and Links to Articles Referenced Above:
The parabolic rise in Gold and in Silver still have a very long way to go as measured directly off of the late 1970’s Charts. In fact, we expect the arithmetic ratio targets for Gold and for Silver, based on the late 1970’s rise for each, to get blown away since we are seeing a logarithmic rise in dollar inflation compared to the late 1970’s. We have just hit the point where the more parabolic rise in Gold set off the leverage for the Gold Stocks in the late 1970’s. Therefore, we expect the real parabolic PM Stock Index Bull is just now commencing. Let me explain. Words: 1259
Early this year we suggested a 50% rise in Gold to $1860 – $1,920 into mid-year. Now, we see the Gold tsunami realizing an approximate 100% rise that will crest at $3,000+ into the middle of 2012, drowning any doubters in its wake. Below are a number of factors that support that view. Words: 1250
The technical situation is ultra-bullish for both gold and gold stocks. Sentiment indicators…continue to show [that] the dollar is poised for a serious decline and the MACD on the gold chart is giving one of the most powerful buy signals in the history of the bull market. The GDX should reach $75 a share by year-end and gold should push to new highs in the $2000 area by January of 2012 [while silver] could possibly be the best investment opportunity available to investors for many years to come! [Let me explain and back up my comments with an array of charts.] Words: 781
The majority of analysts are now of the opinion that gold will reach a parabolic peak price somewhere in excess of $5,000 per troy ounce in the next few years. Given the fact that the historical movement of silver is 90 – 95% correlated with that of gold suggests that a much higher price for silver can also be anticipated. Couple that with the fact that silver is currently greatly undervalued relative to its average long-term historical relationship with gold and silver could escalate dramatically in price over the next few years. How much? This article takes a look at historical gold:silver ratios and what attaining certain relationships would mean for the price of silver should specific price levels for gold be realized. Words: 1411
34% of Americans say gold is the best long-term investment, but how many of that 34% actually own it in the form of coins and bullion? No one has that figure, but my guess would be less than 1% of the total population, and when global investment demand doubles or triples (or more) from current levels — a distinct possibility — and you paint a whole new picture for gold. You begin to understand why gold is not in a bubble at all but, in fact, is in a long-term secular bull market that is still amassing considerable potential energy. Words: 1092
By almost any measure, gold stocks are undervalued but should we load up? Gold mining companies are earning record margins. Stock prices, however, have not responded in similar fashion but when the broader investing community begins to take notice, investors will snap up these highly profitable stocks and push prices higher. The “catch up” in gold stocks could be tremendous but the question, of course, is timing. We don’t know when gold stocks will begin to catch up and the data don’t suggest they must rise right now or that they’ve hit bottom so should we load up just now? Words: 590
With gold miners, in general, so attractively valued relative to the gold bullion price, the question becomes which stocks are the most compelling and have the best leverage to robust precious metals prices…In order to find the diamonds in the rough, I use what I call “The Five M’s” for mining stocks… Market cap, Management, Money, Minerals and Mine life cycle. [Let me explain each .] Words: 1146
If you’re interested in physical gold, I recommend you buy small gold bars which are available in a wide range of weights and can be bought for as little as 1 percent over the price of gold. [That being said, this article outlines five rules to follow before, during and after the purchase process.] Words: 813