-- Published: Tuesday, 8 April 2014 | Print | Disqus
By Stewart Thomson
1. A week ago, gold had fallen to about $1277, and many investors and analysts turned bearish there.
2. In contrast, I suggested that the Western gold community should focus on the potential for immediate upside price action.
3. Please click here now. Thatís the scenario I laid out a week ago.
4. To compare that suggested path for gold, with what actually transpired, please click here now.
5. Gold rallied to my $1308 - $1310 target area. The door of possibility is now open to some further strength, with a short term target of about $1320 -$1325.
6. Note the fabulous buy signal now in play on my Stokeillator (14,3,3 Stochastics series), at the bottom of the chart.
7. The average upside move that tends to follow a Stokeillator buy signal, is roughly a $50 - $200 rise in the gold price. While itís not a good idea to count chickens before they hatch, the technical set-up here is solid.
8. For many months, my main fundamental themes have been unchanged. Since the late fall of 2013, Iíve been emphatic that the Fed would taper, and the taper would be bullish for gold.
9. On the other hand, I suggested the Fedís taper would turn the Dow into a ďwet noodleĒ. On that note, please click here now.
10. America is in an economic upswing, but I donít have the same enthusiastic outlook that mainstream analysts do. They seem to generally believe that America today can grow like the relatively debt-free America of the 1950s did. In my professional opinion, government red tape is out of control. The citizens look like they are stuck in government quick sand. Thatís a tough existence.
11. On the other hand, many gold analysts believe that Americaís debt situation is like a hand grenade. I donít see it that way. I see the dollar fading away, like the rotary phone did. The Dow did rise dramatically over the past few years, but that was only after it almost totally collapsed in 2008.
12. Iím really not interested in buying the Dow or shorting it, any more than Iím interested trading the rotary phone or the dodo bird.
13. The Indian nation election has been my second main fundamental big picture focus. I believe itís arguably the most bullish event for gold of the past 100 years.
14. That election began yesterday. Itís the worldís largest national election, so itís a long process. The results should be released around May 16. To take a hard look into the eyes of the pro-gold frontrunner, please click here now.
15. Other than a bullet or vote counting fraud, I donít think anything can stop Narendra Modi from winning this election. He is strongly endorsed by all of Indiaís major bullion and jewellery associations.
16. These ďtitans of tonĒ are ready to move massive amounts of gold from the Western gold communityís mines, to eager Indian citizen buyers.
17. The price range Iíve predicted for gold over the next four to six weeks, and the ultimate upside resolution from that range, is based mainly on waiting for the Indian election to be completed.
18. The latest polls suggest Narendra Modi is just five weeks away from becoming the prime minister of the worldís most powerful gold buying community.
19. In the big picture, I would argue that he will dramatically accelerate the pace of industrialization in India, and thus accelerate Indian citizen demand for gold even more dramatically.
20. To view what I believe is the most important ďgold volumeĒ chart in the world, please click here now. The key to increasing the wealth of the worldís most powerful gold buyer class is consistently increasing the nationís electricity production. In India, increased citizen wealth is best defined as increased gold buying power.
21. The best Western gold stocks stand to outperform all asset classes, in what should be a gold jewellery era. While some softness can be expected with the Dow under pressure and the Indian election going on, I think some investors may be underestimating the potential for short term price appreciation.
22. Please click here now. Thatís the daily GDX chart. From the highs near $28, GDX has declined on soft volume into buy-side HSR (horizontal support and resistance) in the $22.80 to $24.20 area. Now, itís beginning to rise up and out of that zone.
23. Note the oversold position of the Stokeillator at the bottom of the chart. Itís now flashing a buy signal. In the short term, thatís bullish!
24. The FOMC minutes are due to be released on Wednesday. Iím not expecting the Fed to make any dramatic statements about the ongoing taper. Thatís bullish for gold and generally negative for the Dow. Some analysts are nervous about the possibility of a change in interest rate policy. If the Fed does raise rates, I expect it to be only by a bit. Importantly, a rate hike would likely be related to inflationary concerns rather than to any kind of economic growth spike. That inflation would be exported to Asia, creating even more demand for gold. In all timeframes, the technical and fundamental lights for gold and gold stocks are bright green!
Special Offer For Website Readers: Please send me an Email to firstname.lastname@example.org and Iíll send you my free ďGold Options ReportĒ! Itís possible that Indians engage a gold buying frenzy soon after the election. That could create a ďmini parabolaĒ in the gold price, and create enormous profits for some gold option traders! Iíll show you the specific options Iím using for this play.
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Rate Sheet (us funds):
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Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 Canada
Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of each point and saving valuable reading time.
Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:
Are You Prepared?
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-- Published: Tuesday, 8 April 2014 | E-Mail | Print | Source: GoldSeek.com