Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
USDT Ponzi Scheme FINAL WARNING To EXIT Before Tether Collapses Crypto Exchange Markets - 22nd Jun 21
Stock Market Correction Starting - 22nd Jun 21
This Green SuperFuel Could Change Everything For the $14 Trillion Shipping Industry - 22nd Jun 21
Virgin Media Fibre Broadband Installation - What to Expect, Quality of Wiring, Service etc. - 21st Jun 21
Feel the Inflationary Heartbeat - 21st Jun 21
The Green Superfuel That Could Disrupt Global Energy Markers - 21st Jun 21
How Binance SCAMs Crypto Traders with UP DOWN Coins, Futures, Options and Leverage - Don't Get Bogdanoffed! - 20th Jun 21
Smart Money Accumulating Physical Silver Ahead Of New Basel III Regulations And Price Explosion To $44 - 20th Jun 21
Rambling Fed Triggers Gold/Silver Correction: Are Investors Being Duped? - 20th Jun 21
Gold: The Fed Wreaked Havoc on the Precious Metals - 20th Jun 21
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Breaks Out of 10 Week Trading Range

Commodities / Gold and Silver 2011 Jul 15, 2011 - 02:39 AM GMT

By: Clive_Maund

Commodities

Best Financial Markets Analysis ArticleOn Wednesday gold broke out from a 10-week long box or rectangular consolidation pattern to commence its next major upleg. Fundamentally this coincided with noises emanating from the US to the effect that it is recognized that there is no alternative but to continue with QE. Denials later in the day caused the broad stockmarket to lose much of its gains, but the fact is that there is no alternative to QE, except a global systemic economic implosion, and thus, there is no alternative to QE, although attempts may be made to disguise the extent of it.


On our 6-month chart we can see gold's breakout and how, after 7 days of gains, it is starting to become overbought. However, apart from brief pauses to partially unwind the overbought condition, it is expected to continue to advance strongly in coming weeks and months, overbought or not, and this positive outlook is reinforced by the strongly bullish picture for silver and Precious Metals stocks.

Gold 6-Month Chart

There has been talk in some quarters about gold "being in a bubble", but our long-term chart for gold going back to before the start of the bullmarket, shows that such an assertion is ridulous - gold has been in a steady uptrend as it has moved simply to compensate for the destruction of the purchasing power of fiat. What we are seeing here is real money, which gold is, standing out in an ocean if increasingly worthless fiat. Since gold has not been in a bubble and has not attracted the attention of speculators to any great degree it can be said to have an almost full tank of "bubble power", and if, in addition to its continued rise to compensate for the relentless attacks on fiat by central bankers and politicians, it does attract the attention of the investing public at large, its rate of rise could very easily accelerate rapidly and it could go into an ascending parabolic arc. This development is actually viewed as inevitable as we move ever closer to the fiat endgame of hyperinflation, but as we can see on the chart, it hasn't even started yet.

Gold Long-Term Chart

Speaking of gas in the tank, the last COT chart showed a setup similar to that which existed back at the start of February - before a $260 runup in the price of gold - so the impications of this chart are obvious.

GOLD COT Chart

We are going to end this Gold Market update by briefly summarizing the "global playbook" - once you grasp what is set out below you will understand why the continued advance in the prices of gold and silver are inevitable, and why their rate of advance is set to accelerate...

There is no way of resolving the Global Debt Crisis in a direct and honest manner - any attempt to tackle it head on would result in a global economic implosion and deep depression - and very possibly a state of total anarchy. The "de facto" decision has already been taken to inflate it away. While this will ultimately result in hyperinflation and possibly depression anyway, the transition to that state will be a lot smoother by taking the inflationary approach than it would be by taking the draconian root and branch approach. There will still be small to medium size defaults such as Greece, then Portugal, and after that probably Spain and Italy, but what will happen in each of these cases as they arise is that imminent default will be headed off at the last minute by them being bailed out and propped up, and whatever money is needed to patch things up and keep the system limping along will be forthcoming. In the United States, after much ritual wrangling, the debt ceiling will be raised - again and again and again, and the Fed will continue to backstop the Treasury market, and there will be QE3, QE4, QE5 and on and on, even if disguised under other names, and money will be manufactured in ever increasing quantities to keep eveything pumped up. For an investor it is crucially important to grasp what this means - it means that every default scare of this kind that spooks the markets will present another buying opportunity, as just happened with Greece, especially in commodities and in particular in gold and silver. A country such as Portugal will verge on default, bankers and politicians will run around like headless chickens for a few weeks, markets will drop, then suddenly - hey presto - the necessary funds to "kick the can down the road" yet again will be forthcoming and markets will breathe a sigh of relief and rally - and inflation will continue to build as the debt bill is pushed ever more onto the populace. The middle and lower classes of the world have been targeted to pay down the debts through ever increasing inflation that will reduce most to a state of penury. The good news is that if you understand the game THAT DOES NOT HAVE TO INCLUDE YOU.

The continuing debasement of fiat currencies around the world means that the bullmarkets in gold and silver are set to continue and to accelerate. Up until now both gold and silver having been moving higher in large part simply to compensate for the destruction of the purchasing power of fiat caused by inflation, but there is going to come a point when IN ADDITION to these important drivers, speculative interest in both metals is going to ramp up, as speculators are increasingly attracted to both metals simply because their prices continue to rise, with no prospect of them ceasing to do so. In addition there will be an ever increasing flow of funds into the Precious Metals by those desperate just to preserve their purchasing power in the face of the demise of fiat. This increasing influx of funds both from desperate investors and from speculators will eventually power the acclerating ramp in both gold and silver.

While it is true that China and Europe have been playing a dangerous game of chicken in recent weeks by raising interest rates, it is presumed that they will wake up soon and "come on side" and fully partake in the money pumping game, because if they don't the dollar will collapse relative to their currencies and their own economies will implode.

By Clive Maund
CliveMaund.com

For billing & subscription questions: subscriptions@clivemaund.com

© 2011 Clive Maund - The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

Clive Maund Archive

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


Post Comment

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