America To Lead Opec?
Nov 13, 2012
- I think the daily gold chart is beginning to look like it was painted by Renoir. To view it, please click here now.
- Gold is range trading between about $1550 and $1800. There have been 3 touches of the $1550 area, and 3 of the $1800 area.
- I believe the situation will be resolved with a strong penetration of resistance at $1800. That should usher in a trending move that could take gold to $2100.
- I highlighted minor HSR (horizontal support & resistance) at $1730 and $1758. After a big rally from the recent lows near $1672, the HSR at $1730 has caused gold to rest a bit.
- While the odds favor a breakout in the gold price to above $1800, nothing is for sure in any market. A clear breakdown below $1550 could see gold fall all the way to $1033.
- In the final analysis, it won’t be the action of gold on the price grid, but your intestinal fortitude, that carries the day.
- China is in the news today. The man who could be China’s next premier has some serious concerns about China’s GDP numbers.
- Rail shipments and bank loans have plunged. It could be China, rather than America, that is next to engage in massive quantitative easing. That could be the catalyst that pushes gold thru $1800, and starts the journey to $2100!
- Silver functions a lot like gold’s “little brother”. Please click here now. There is a nice uptrend in play, and silver is displaying the same hesitation shown by gold at current minor trend HSR. I don’t see anything to be concerned about here.
- Obviously, we all want to see silver over $40. I believe all silver investors will be pleasantly surprised, when gold surges over $1800. Force yourself to grind through the waiting period.
- The HUI index of gold stocks continues to drift slightly slower, after jamming into the 519 area HSR when gold attacked $1800. Please click here now. I’m sure that no gold stock investor is enjoying the battle to rise over 519, but it’s a major hurdle and time is required to take it out.
- Many of you have written me emails recently, noting various individual gold stocks that have “bucked the correction trend”. They are shooting higher on good volume. I track hundreds of the gold community’s favorite stocks, and it seems that every day another one seems to stage a surprisingly strong move.
- That type of market action really hasn’t occurred since 2006, and it’s an indication of the growing strength of the gold stocks sector.
- The International Energy Agency has just released a blockbuster report. It argues that the United States could become the world’s largest oil producer very quickly. Can you picture America as the new leader of OPEC? I can.
- The IEA report also suggests that the US could become a massive natural gas exporter by around 2020.
- This energy situation could be very positive for domestic mining companies. Institutional investors, particularly pension funds, like to see stability in a situation before they place substantial risk capital on the table.
- The IEA report opens the door to a more stable oil price, at least domestically, for a long period of time. When investing in mining companies, that’s exactly what pension funds like to hear!
- In many OPEC nations now, the price of domestic oil is much lower than the price they charge to foreign customers. Is it possible that the same thing happens in America, and the giant US government deficit is solved by enormous oil exports?
- I don’t know if the IEA’s oil report scenario would “solve” the deficit problem, but it would certainly add some serious stability to what is currently a very unstable situation.
- Natural gas is a wild card in this situation. If America begins to engage in substantial exports, and that happens while China goes into recession, institutional investors around the world could pour money into America.
- Natural gas is a key holding for me. It’s bigger than my oil exposure now. I envision a situation, within about 5 years, where oil is exported from America at $200-$300 a barrel, and sold within America for $100-$200 a barrel.
- I expect natural gas to trade above $20 within that same timeframe. The US government could tax domestic natural gas at a 100% rate and it would still be priced very reasonably for the consumer.
- The “fiscal cliff” has been grabbing headlines recently, but action speaks louder than words. As things stand now, the liquidity flows picture speaks a thousand words; institutions are saying they are afraid of the fiscal cliff, but the Dow has declined by only about 800 points.
- I believe that America’s economy needs to be analyzed separately from the OTC derivatives crisis. OTC derivatives brought about quantitative easing, and has put tremendous upwards pressure on the gold price. I think that the emergence of America as the world leader of OPEC will be extremely positive for the global price of energy and gold, and even more positive for the share price of North American mining companies!
Nov 13, 2012
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