-- Posted Tuesday, 9 August 2011 | | Disqus

Anybody who has been following Jim Sinclair over the years will know that this veteran gold bug first predicted that gold would break $1,650 in early 2011 a decade ago. He missed that by a few months but still his record is outstanding.

Nobody has come close in this decade-old bull market for gold in making these calls. Then consider his record as a younger man as arguably the hottest trader in precious metals of the 1970s bull market.

So when Jim Sinclair points out, as he did last week, that once gold passes $1,764 then we have the lift-off for a parabolic ascent in the gold price everybody ought to be paying attention.

$1,769

Well the Bloomberg monitor has $1,769 at the time of writing, so this is it. Mr Sinclair explains in the video listed on the Home Page of this website that his reasoning is purely arithmetical in choosing $1,764.

He has a very distinguished ancestor whose record on Wall Street in the 1920s was outstanding and whose formula for share price movements Mr Sinclair has applied to gold.

From a more fundamental perspective there is also a reason to be very bullish about gold prices from the market turmoil of the past few days. It is not just that gold is an alternative safe haven to T-bonds. It is that the Federal Reserve’s policy response is likely to be QE3, or money printing.

Money printing

Now what more do we need to confirm gold as the only solid money, and silver too, than another bout of money printing? Is this not inflation at its very source and the ultimate driver for precious metal prices?

When this policy action is laid on top of the technical chart position outlined by Mr Sinclair then you really can start to see the parabolic or exponential rise in gold prices that he predicts actually happening.

We will see what happens now. It could be time for gold bugs to knock back a few pills for high blood pressure!

-- Posted Tuesday, 9 August 2011 | Digg This Article

About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in 1999 to complete his first book, a history of the Bovis construction group.

Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.

Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.

He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.

Order my book online from this link

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