Gold: Set To Surge On Major News Stewart Thomson
Mar 14, 2017
- After Janet Yellen first hiked rates in late 2015, the precious metals market rallied in a big way in the first half of 2016. Please click here now. Double-click to enlarge this GDX daily chart.
- In late 2016 the Fed hiked again, but the metals market rally in 2017 has been more subdued. Why?
- For the main answer to that question, please click here now. Double-click to enlarge this dollar versus yen chart.
- The bottom line is that the gold price has tremendous correlation to the price action of the dollar versus the yen. In 2016, the dollar collapsed against the yen. In 2017, the dollar has declined against the yen again, but only moderately.
- Hence, the rally in gold and gold stocks has been less exciting than it was in 2016.
- Please click here now. That’s a shorter term look at the dollar versus the yen. A loose rectangle is in play, and the next big move will almost certainly be determined by key fundamental news being reported this week.
- On Wednesday, the Fed decides whether to raise rates, and the debt ceiling (which I call a floor) comes back into focus. There’s also a major election in the Netherlands. A populist win there could rock major markets. On Thursday, the Bank of Japan meets to decide its next major policy move.
- Fundamentally, gold is well-supported, and the news this week is likely to be quite positive for gold and associated assets.
- Please click here now. I’ve suggested quite emphatically that in a rising interest rate environment, both gold and the dollar can rally together, and top economists at CITI are now taking note of this fact.
- That means their institutional clients are taking note of it, which adds more support to gold. Gold bugs clearly have nothing to fear from a higher dollar, and the dollar is floundering against the yen and the Swiss franc.
- It may also be set to tumble against another key currency. Please click here now. Double-click to enlarge. After breaking a key uptrend line, the dollar seems poised to break down from a substantial double top pattern against the Indian rupee.
- That would be good news for India’s current account, and increase the already-enormous gold buying power of Indian citizens. That’s because a surge in the rupee would chop the cost of gold in rupees, and Indians are obsessed with buying more gold when the price drops.
- Please click here now. Next, please click here now. I’ve been adamant that investors need to fade the US stock market a bit (except for bank stocks which benefit from higher rates), and buy Chindian markets.
- In a nutshell, the American empire is ending, and the Chindian empire is beginning. In the short term, the US business cycle is long in the tooth, and that’s when bank stocks and gold stocks are an investor’s best friend.
- Rising rates will eventually crush the US stock market. India’s central bank chief appears to be little more than a government-appointed “yes man”. So, he’s unlikely to raise rates, even as the US hikes aggressively.
- That’s going to create substantial institutional liquidity flows out of the US stock market and into India.
- On that note, please click here now. Double-click to enlarge this spectacular Indian stock market ETF chart for INDA-NYSE.
- It’s blasting upside from a huge inverse head and shoulders bottom pattern. It’s a nice fantasy to believe that Donald Trump can cheerlead the US nation to “world leader forever” status. Horrifically, the reality of the US situation is far different from that wonderful fantasy.
- Cheerleading works in a limited way when interest rates are low. When they rise and the yield curve inverts significantly, cheerleading doesn’t work at all.
- That’s because institutional money managers don’t care what the top government cheerleader says or does when the yield curve inverts as rates soar. They just sell US stocks, and they do so… as a stampeding herd.
- If Trump doesn’t renew Janet Yellen’s mandate to lead the Fed and appoints a government “yes man” in her place who leaves rates low, the banks will just keep their money at the Fed and the US economy will enter a state of significant deflation.
- Trump is also beginning to pressure Japan to push the dollar lower against the yen. It’s likely a question of when, not if, Abe orders his central bank to kill the Japanese QE program. When that happens, the dollar could stage a dramatic collapse against the yen. If the dollar collapses against the yen, it will collapse in an even bigger way against gold.
- The end of QE in Japan would create enormous liquidity flows out of government bonds and into the banking system. Inflation would surge, and Japanese citizens would be strong gold buyers and exporters of significant inflation to America.
- Please click here now. Double-click to enlarge this important gold chart. The news events this week could easily send gold to my $1180 buy zone, and then to $1220 or even $1245. I’m a very happy gold stock buyer here in the $1200 area. It represents great value for enthusiastic gold market investors!
Mar 14, 2017
email for questions: firstname.lastname@example.org
email to request the free reports: email@example.com
|Tuesday 16th Jan 2018
Special Offer for 321Gold readers: Send an email to firstname.lastname@example.org and I'll send you my free “Oil My Golden Chariot!” report. I highlight five oil stocks poised for 100% potential gains as oil makes its way to $80, and five gold stocks set to blast to all-time highs before gold hits $1600!
Updates Subscription Service: Note we are privacy oriented. We accept cheques.
And credit cards thru PayPal only on our website. For your protection
we don't see your credit card information. Only PayPal
|Subscribe via major credit cards
- or make checks payable to: "Stewart Thomson" Mail
to: Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario
L6H 2M8 / Canada
is a retired Merrill Lynch broker. Stewart writes the Graceland
Updates daily between 4am-7am. They are sent out around 8am. The
newsletter is attractively priced and the format is a unique numbered
point form; giving clarity to each point and saving valuable
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: