Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Inflation Is Mortally Wounded And Rapidly Fading, Dump Gold?

Commodities / Gold & Silver 2009 Sep 26, 2009 - 09:32 AM GMT

By: Ronald_Rosen

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleIt is my opinion that you should ignore all fundamental stories and statistics about runaway prices and hyperinflation at least for the next 8 to 12 months. Gold, silver, and their shares are in the process of being sliced, diced, baked, broiled, and slaughtered. A rare, very rare, opportunity to acquire gold, silver, and their shares at lower than bargain prices will arrive when the [C] leg down that I have been describing and writing about bottoms. This report presents quarterly logarithmic charts of gold, silver, the HUI, and the U. S. Dollar Index. If you are a trader and are familiar with and can handle the short selling process and its dangers you may reap a small fortune over the time span that the [C] leg process (down) requires to complete its work. Its work involves destroying overly enthusiastic precious metals bulls.


The evidence as I see it indicates that the precious metals complex, gold, silver, and their shares will be undergoing a severe decline for about eight to twelve months. I believe this corrective process will be the final part of the correction that began in March 2008. That is the bad news. The good news is that once this corrective process bottoms the next phase of the bull market in the precious metals will be a dynamic, explosive, and market shaking process that engulfs the entire world of markets. The “push me, pull you” process that the gold community has endured for over ten years will have morphed into a gold and silver stampede process.

 
The long term pattern for most active and heavily participated in bull or bear markets tends to unfold in Five Major Waves. Once the Five Major Waves are complete a Major Three Wave reversal tends to take place. The U. S. Dollar Index appears to have completed two of the waves of its Major Three Wave reversal pattern. The third or [C] wave up appears ready to begin its rise. The turns occurred at Delta Long Term turning points.

                       U. S. DOLLAR INDEX QUARTERLY CHART

Gold bullion ever since 1999 has embarked on a (probable) Major Five Wave bull market. Gold bullion has completed five minor waves of its Major Wave Three of its Major Five Wave bull market. Ever since March 2008 gold bullion has been working on an [A], [B], [C] correction of the completed five minor waves. Wave [C] down has either begun or will soon begin its downward journey. This is a logarithmic quarterly gold chart. The rising trend line will be intersected by a declining gold price approximately 3 quarters from the end of this September 2009 quarter. Give or take a week or two, the [C] leg for gold may bottom at LTD # 5 low.

The standard deviation for arrival of LTD # 5 low is from July 14, 2010 to January 19, 2011. Since leg [A] up and leg [B] down each consumed about three quarters it is reasonable to assume that the [C] leg down will also consume three quarters. It would be quite normal for the price of gold to decline to a point slightly below the rising trend line. Just about every last remaining gold bug that can be removed from the bull’s back will be removed.

I suspect that “DEFLATION” and “DEPRESSION” will be plastered all over the headlines and television news just as gold is ready to bottom. Looking at this logarithmic gold chart and the rising trend line one could say, “That decline looks reasonably normal. It can’t be so bad.” However, holding a full or over extended position can and will most likely feel like “Holy Hell.”

In addition to its wave pattern the quarterly chart of gold clearly shows that the peaks in Major Wave Three have occurred at Fibonacci quarters 5, 8, 13, 21, and potentially 34. There are three days left in the September quarter which is quarter 34. We will know by Wednesday if this pattern of peaks at Fibonacci designated quarters will continue. It appears to me that the pattern has already been confirmed by the decline in the gold complex this week. A pattern of this type calls for a bottom slightly below the [A] leg bottom of $681. The time consumed by leg [C] down should be relatively similar to the time consumed by the [A] leg down. Once the [C] leg down is complete the bull move should resume.

                   GOLD QUARTERLY PIT CHART LOGARITHMIC

The HUI and gold bullion topped together in March 2008. The [A] legs down of the HUI and gold bullion bottomed together in October 2008. Their [B] legs up topped together. The probabilities are high that their [C] legs down will bottom together. The [C] legs of the HUI and gold bullion should bottom lower than the price at the bottom of their [A] legs down. That means that the HUI may bottom lower than 150.27.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments


04 Oct 09, 06:38
gold

US is not major buyer of gold . China and India are. US will buy only when there is inflation . Now India , Korea , Indonesia have inflation and China and Thailand will join them soon . US currency is inflated massively . Are you happy to hold US$ ? Is US $ stable ? Are you going to dumb gold ?

Are you wise ?


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules