Sunday, September 26, 2010


The question was posed that perhaps gold is only rising because the dollar is falling. While every C-wave has been driven by a collapsing dollar you will see in the next several charts that gold is rising in every currency. Every country is debasing their currency.

As you can see gold is rising in all currencies even in the strongest of all currencies, the Yen.
What's more, gold is also rising against all other commodities since late `05.

Remember how I've pointed out that oil was the leader during the first phase of the commodity bull and how it should under perform during the second phase. That is because the fundamentals are now impaired in the energy markets but are improving in the precious metals sector.
I've been of the opinion that the gold:oil ratio will now remain in a range above 13 for the rest of the commodity bull with occasional spikes above 20 as C-waves progress.
At the moment the gold: oil ratio is at 17. I expect that will move up to or above 22 by the end of the current C-wave sometime this spring.


  1. Hi Toby, i think the big picture is correct, but if you take under the lens this year in EURO, whenever Euro was low(exchange rate to USD) -gold was high(MAY-JUNE), the beginning of September likewise.
    But then when the dollar got weaker, the euro got stronger.
    I think we will need chaos in all currencies this year in order to get the actual winnings gold is showing in the charts and i mean dollar going down, euro down, etc.

    Today actually i think the fact that European Central Banks stopped selling gold, is a sign, a protective measure against self distruction.


  2. Toby,

    What do you think of the predictions of Prechter? I just can't agree with him obviously because I'm a metals bull. He came out today on CNBC calling again for 1,000 on the Dow.

  3. Precther is always going to call for the end of the world the reason is he's not interested in making money in the market he's only interested in drawing perma bears in to buy his subscription service.

    He's using shock and awe marketing strategies to get bears to buy into his EW nonsense.

    EW is completely worthless crap. Just toss it in the trash can where it belongs and get on with making money in the secular bull.

  4. Yeah, I have to agree DOW 1000 is nuts. Doesn't even make sense, Prechter is hysterical. I don't think the US is going anywhere.

    Further to that point....This dollar won't go it trying to come keeps trying to go lower on smaller contract volume, I don't know if that lower trend can continue unless more volume on the way down developes....I think it bounced back up above 80 again today.

    So I wonder if the FED has done a good job of building a new commodity bubble...if oil goes down into the 50's then could gold go below $800?(based on the gold/oil ratio). I suspect it would be short term if it did do that type of price drop?

  5. I really doubt we will ever see $800 gold again, certainly not for the rest of this bull market.
    Gold might correct back down to $1200 next summer during the next D-wave but that's prbably about as close as it will get.

  6. Heh Toby, since I have been reading your blog, ALL your calls have been right on the money.

    I have never understood or believed much in these cycle theories but as youve been so spot on I want to know how long you think any correction in gold and silver will last. Thanks.

  7. My best guess is that gold will test the breakout at $1265.

  8. did you see that hard bounce from 1277 in the future market early morning

    we had that and gold just pushed back to 1309


  9. Hey Toby,

    Do you see the USD due for some sort of bounce based on cycle dates?

    Seems to be getting a little too crowded on the short-side.

  10. Don't be surprised to see a 'paper' price of gold print at $200 at some point in the future. Question is, will you have the mettle to hang on? Well, will ya? See FOFOA and freegold.

  11. I seriously doubt we will ever see 850 gold again.

    I also doubt we will see sub 1200 gold for the duration of this bull market.

    The only way we would ever see $200 gold is if the currency fails and we have to go to a new international currency.

    Make no mistake this bear market will be about the failure of fiat currencies and gold will continue to rise until that process is complete.

  12. enjoy this
    Why Gold Is Rising
    ...These sorts of events do not take place very often. But when they do take place, they are widely based and difficult to reverse...

    and this instead explains why we don't approach since now iperinflation even if centrals banks has print an icredible amount of money...
    How the Bankers Have Trapped



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