However, all of the conditions necessary to launch the bubble phase are now in place. Gold is in the process of putting in an intermediate degree bottom. That bottom, which is only days away if it didn't already happen today, is going to be the single greatest buying opportunity, probably of the decade.
Gold sentiment is at multiyear lows. Retail traders that bought at $1900 have gotten wiped out. The media is full of stories calling for the death of the gold bull. Institutional traders from John Paulson, George Soros, and Dennis Gartman have all gotten knocked off the bull.
Breadth in the universally hated mining sector is back down to levels that have only been exceeded during the crash in 2008.
This sector has consolidated for so long that no one believes in mining stocks anymore. This is exactly the same sentiment that was prevalent in the silver market in the fall of 2010.
All the conditions are in place to launch the next stage of the secular bull market.
Up until now my expectation has been that we would see gold consolidate for probably the better part of a year before the next C-wave breaks out to new highs.
However, the scenario that is unfolding in the CRB and dollar indexes has me wondering if the gold bull isn’t going to start evolving much faster than I originally expected. Let’s just say that if I am correct and the dollar is on the verge of topping then we are probably going to see a much shorter consolidation than originally expected. Gold could launch much more quickly out of the B-Wave bottom than I expected and move to new all-time highs as early as the next intermediate cycle.
As a matter of fact I’m pretty confident that if the dollar turns down it is going to trigger the beginning of the third and final, bubble phase, in the gold bull market.
The public is already starting to become aware of the gold bull. All we need at this point to start the flood is for gold to recover quickly from this selloff. If gold quickly shoots back up and tags, or penetrates that big psychological $2000 number I expect it will be the siren call that draws the public into the bull market. And it is the public coming into a market that triggers the bubble phase.
During this phase of the bull I expect we will see the normal ABCD wave pattern break down as gold starts to accelerate into what will almost certainly be the most incredible parabolic advance, maybe in history. By the fall of 2014 I expect we will see gold somewhere between $7,000 and $20,000 an ounce.
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Hi Gary:
ReplyDeleteYou expect the USD to correct in the near term. To which level? Why?
Gary, I think you are wrong. Dollar is on the middle of massive up cycle.
ReplyDeleteWhile sentiment is lop sided I grant you, but I believe it is truly different this time.
I do not believe the numbers are easily available but see if you can compare the Greece stock market and the sentiment.
This time it is different.
G,
ReplyDeleteI concur as I posted dec 11 4.03pm..SMT.
"You (everyone interested in AU and in protecting their wealth)needs to be there for the 3rd phase ...its gonna be a blast".
Quite astue to note the shortening of anticipated cycles and changing sentiment. Things don't always play out as expected. As with any type of risk assessment (investment profile) you gotta keep your finger on the pulse. This doesn't imply you were wrong initially, but merely highlights the need for agility and liquidity...as you so rightly put..."things could evolve much faster". I like that one...I would call it a bit of an understatement though. 1Q12 will show all IMHO.
Brave call on 2014 AU $$$ 7-20k.
Lets just take one step at a time.
We break $2k and the upper band for this should be mid 2000's. Rest and correction. The next mark would see 3500 and again with rest and correction before the exponential move. Some very well regarded gold bugs are calling somewhere north of $10000.
I maintain my faith in this last great bull market, not only from the reasons that you put, but many other factors that will enforce Gold's rightfull place in our monetary system.
The greed mentality and the "Lizard core - Michael Lewis/Peter Whybrow" will ensure that your prediction together with a few others, comes to fruition. Death and taxes are the other certainties in life.
Further words of advice...anyone who is not committed to the finality of this bull will ensure their undoing. Short termism..is a dying trade. Keep the faith.
I agreee that this is THE BOTTOM for gold. It looks like one, it smells like one,and like you said media buried gold two days ago.
ReplyDeleteNot to mention "Roubini indicator".
He was all over Twitter yesterday saying that gold bugs are proven wrong and how gold is worthless piece of ****.
Roubini is never right, you just have to use him as contra oscillator and you can't go wrong.
Your link goes to GARY SAVAGE subscription page
ReplyDeleteEri,
ReplyDeleteOne swallow does not make a summer. Look at other indicators, including GLD holdings, Sprott ETF premiums, demand for one ounce coins, Call/Put ratios on GLD.
Those do not suggest we are even close to a bottom.
I tend to agree with the author. Italy has to refinance nearly a half trillion of debt in 2012. The only way someone is going to buy that much is if the US prints money and lends it to them. The act of printing, regardless of whether the money stays here or goes overseas, will cause gold to go up in dollars and in every other currency.
ReplyDeleteThe current pattern is also consistent with the gold price falling. When everyone expects it to fall...it can indeed fall. For gold to rise the USA needs to do something big to cheapen the dollar. Although we expect this, it has not happened yet (so far as I know). We have already seen signs of a top, with gold ads on television, gold stores all over town, an epidemic of gold cheats, and governmental central banks heavily buying gold. Obama's economic policies seem to have evaded a catastrophic depression so maybe he will not cheapen the dollar further. Moreover, by closing the wars overseas, Obama has stopped huge expenses.
ReplyDelete"Given the gut-wrenching moves of the past few days, and the backdrop of a stunning rally in gold over the past several years, it may be wise to wait a few days until gold finds a trading range before putting on any positions. In my opinion, given the recent sharp sell-off, and the upcoming light-volume that accompanies the Christmas break, we could see bargain-hunting support for gold in the coming weeks, before gold finds its direction in the New Year. I would suggest... "
ReplyDeleteDayOnBay has some insights on gold's recent tumbles, you can see the full feature here: http://www.dayonbay.ca/index.php/commodities/goldbugs-gets-jittery.html
I time entries based on cycles analysis. Gold is now in the timing band for a bottom. At this point we may or may not have seen the B-wave bottom. I don't need to make a perfect entry I just need to get "close enough".
ReplyDeleteGold is at that point.
gold will certainly rally but once it go back to $1000 ounce.
ReplyDeletethis is confirmed from Thomas Bulkowski's the Bump-and-Run Reversal Top chart pattern
http://www.resourceinvestor.com/News/2011/12/Pages/Gold-Could-Correct-Lower-Than-1600ozt-.aspx
We are never going to see $1000 gold again. Probably not even after the gold bull expires.
ReplyDeleteThe only time a correction of that magnitude can happen is at an 8 year cycle low. The next one isn't due until 2016.
The only thing one will ever accomplish by trading based on "chart patterns" is to get poor.
Saif, you call Sprott premiums and GLD holdings indicators?!?! Are you kidding me?
ReplyDeleteLike Gary said this is the bottom in gold and you probaly never gonna see this prices again.
Gary is coming from cycle theory perspective, but i am coming from pure technical analysis perspective.
Gold hasn't been this oversold since 2008.
There is also RSI and slow stoch positive divergence which should propell it higher.
Number of newly born dollar bulls and dollar bulls screaming DEFLATION is stupendous.
Number of "Euro is dead" bears holding short interest on Euro is at record.
I believe we should be at 1800$ by New Years Eve
How soon u idiots forget,Here is refresher Eri from Aug 9th from this site.
ReplyDeleteYour comment followed by mine.
USD 73.91 Oh my God, that's really surprising.
Saif, are you alright?
August 9, 2011 2:15 PM
saif said...
Sure Eri,
Thanks for the concern :)
I bought Statoil at 20.2 and more Total, ENI, Barrick and Petrominerales at yesterday's close.
I covered my CAD short at 99.88.
Still short Euro and Aussie versus the dollar.
Was an awesome day.
You will be pleased to know I made over 20% on those stock trades and my short positions on EUR and AUD are deeply in the green (not taken profits there).
Disturbing news about gold.
ReplyDeletehttp://www.reuters.com/article/2011/12/19/us-gold-poll-idUSTRE7BH09L20111219
Disturbing news about gold.
ReplyDeletehttp://www.reuters.com/article/2011/12/19/us-gold-poll-idUSTRE7BH09L20111219
That's probably a better contrarian indicator than anything else. At the moment we are just waiting for oil to bottom.
ReplyDeleteThose who speak to gold falling are puffing hot air. They are myopic. They need to take the blinders off. Only someone who can satisfactorily explain why gold has risen year after year for more than a decade is in any position to suggest its direction going forward. I listen to the voice that has been 100% correct up till now. The reasoning is sharp and precise. And that voice says one thing. Gold will not stop what it's doing. Not while you live. The root cause has festered for well over a century, like a cooking pot. Its not going to change direction for you, because you wish it, or because you shout it from a pedestal. It will do what it has to. It is a reflection of where society has gone, as housing is a reflection of demographics. When gold does fall, you will wish you were not there to see it. And you won't be for long.
ReplyDeleteGary, Gold continues to go down to $1556 today. Any view change?
ReplyDeleteGold is moving down into a yearly cycle low. Once that bottom is established we should see a sharp rally to test $1800-$1900.
ReplyDeleteIf the dollar tops then gold will be at the very beginning of the bubble phase of the bull market. That phase should start slowly and finally peak in the fall of 2014 or spring of 2015.