-- Published: Tuesday, 9 January 2018 | Print | Disqus
By Stewart Thomson
1. I told subscribers to expect $1320 to function as a headwind for gold on this rally, and thatís happening right on schedule. To understand the nature of this headwind, please click here now. Double-click to enlarge this important weekly gold chart.
2. Note that the two biggest volume bars both occurred as key events in India occurred. It could be said that when America catches a general stock market cold, world markets get the flu.
3. Horrifically, when India catches the gold demand sniffles, Western gold and silver stocks can look like they have financial Ebola.
4. Itís clear that $1320 has functioned as a significant headwind to all the major rallies of the past four years. The good news is that technically, resistance weakens the more times it is tested. Iíve predicted that gold is nearing the day when it shoots up above $1320 and begins the climb towards the next massive resistance zone at $1500.
5. Will India be the catalyst that launches the price blast to the upside? Well, thatís the most likely scenario, but a big helping hand could come from new central bank chief Powell in America. Heís due to be sworn in on February 4, 2018. Thatís less than a month from now.
6. Powellís proposed deregulation of Americaís small banking industry, combined with rate hikes and quantitative tightening (QT) should create a major money velocity bull cycle. That bull cycle is more important to gold stocks than bullion. Thereís no point buying gold stocks if they canít outperform low risk bullion.
7. For bullion, the most likely catalyst for significantly higher prices is a long overdue gold import duty cut in India.
8. The good news is that Iím predicting that both a duty cut and the US money velocity bull cycle are coming. India has national elections in 2019 and Prime Minister Modiís promises to help jewellers and create a million jobs a month are dismal failures.
9. To win the election, itís likely that Modi soon starts spending money like water and asks his finance minister Jaitley to cut the gold import duty. With both India and Powell poised to take action that is positive for gold, all precious metals market investors (both bullion and mine stocks) should feel very comfortable now.
10. For a closer look at goldís price action here in the $1320 resistance zone, please click here now. Double-click to enlarge.
11. The $1300 and $1270 price zones both offer decent minor support. A pullback to $1270 would also increase symmetry in the big weekly chart inverse H&S bottom pattern.
12. Iím a buyer at both price points, if gold trades there. I never recommend cheering for lower prices, because governments generally hate gold. If the price moves lower, governments can gloat over the supposed superiority of their fiat money, so I never cheer for lower prices.
13. Gold doesnít need any ďhealthy correctionsĒ against government fiat money. As money, gold is always healthy, but price declines do happen, and investors need to take buy-side action at support zones like $1300 and $1270.
14. The Chinese central bank stopped buying gold once the IMF accepted their fiat yuan into their global fiat currency basket. I expect the same thing to happen in Russia in time. The bottom line is that governments do not like private money, and gold is the ultimate private money.
15. Gold competes with what are generally pathetic government fiat systems, but as long as governments can prevent gold from becoming a major medium of exchange, investors will always buy gold as an investment to make fiat dollars rather than buying fiat as an investment strategy to get more ounces of gold money.
16. What could resurrect gold as a medium of exchange globally? For the likely answer, please click here now. Double-click to enlarge this fabulous Ethereum chart. Blockchain (aka crypto) currencies have attained a market capitalization of about $700 billion (USD), and Ethereum is one of the hottest kids on the block!
17. Itís also one of my top four core blockchain holdings. Iím an eager seller of trading positions this morning in the $1200 zone. Nothing feels better than starting a new day by booking juicy profits. Iíve already placed new orders to buy fresh trading positions in the $1150, $1100, $1050, and $1000 price zones, and I urge all Ethereum fans to consider taking similar action.
18. My www.gublockchain.com newsletter is designed to put investors in the hottest blockchain currencies and make them richer by taking action at my key buy and sell points.
19. In the big picture, blockchain infrastructure experts are working to create powerful partnerships between gold and blockchain currency. On that note, please click here now. Goldguardís fabulous ďOne GramĒ gold backed blockchain token appears to represent just the beginning of an era that will see significant gold-blockchain business partnerships created around the world.
20. The very nature of bloated government fiat money limits investment returns in those traditional currency markets. In contrast, blockchainís superior technology and limited supply is making returns that frequently exceed 10% a month the ďnew investor normalĒ.
21. Gold-blockchain partnerships could weaken the power of central banks, and perhaps ultimately make them obsolete. Iíve predicted that central banks donít become obsolete, but they will be forced to buy private money like Bitcoin, Ethereum, Ripple, and Litecoin. They will start to hold them as central bank and treasury reserve assets when one or more of these key blockchain currencies becomes a widely-used medium of exchange.
22. The coming blockchain-gold partnerships should boost global demand for gold, and thatís good news for gold stock investors. Please click here now. Double-click to enlarge this great looking GDX chart. A possible flag pattern is in play. If it fails, that failure simply creates a beautiful high right shoulder of an inverse H&S bottom pattern.
23. Gold and silver stock enthusiasts need to respect the power of $1320 resistance. Investors who are nervous should buy GDX put options. Iím not nervous. Iím excited to watch Modi open the spending spigot and to see Jerome Powell unleash the money velocity hounds at thousands of small American banks, with a deregulatory bomb.
24. Chinese New Year buying appears to have started early in December but itís in a lull now. Indian dealers are also in no hurry to buy gold after a $90 rally. The COT report shows commercial traders adding 40,000 short gold contracts, which likely means they respect the $1320 resistance zone. So, gold stock traders can book light profits now. Rebuy lightly if gold trades at $1300. At $1270, all investors should be eager buyers!
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Written between 4am-7am. 5-6 issues per week. Emailed at aprox 9am daily.
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 qualified 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, 9 January 2018 | E-Mail | Print | Source: GoldSeek.com