1. If gold is to move substantially higher and retain the bulk of those gains, inflation needs to become a significant concern.
2. Please click here now. Double-click to enlarge this eight hour bars gold chart. An upside breakout seems imminent, but patience is required.
3. A breakout from that drifting rectangle pattern I’ve highlighted on the chart is significant, because it creates a much bigger breakout on the monthly chart.
4. Please click here now. Double-click to enlarge. Gold is almost ready to begin a significant leg higher.
5. The US presidential debate had almost no effect on the gold price, and that’s because most of the questions had nothing to do with the economy.
6. On that note, please click here now. Double-click to enlarge this interesting 8 hour bars chart of the Dow.
7. The US stock market initially rallied after the debate, but it’s since given back most of those gains.
8. There’s a clear bear wedge pattern in play on the chart, and that follows a breakdown from a head and shoulders top pattern.
9. The bottom line is that the September – October time frame is crash season for the US stock market, and the situation is grim.
10. Who won the debate? Well, mainstream media is essentially socialist, and they say Hillary won.
11. I agree, but please click here now. Social media statistics suggest that Trump won the debate, and that’s because social media was more focused on the economy than mainstream media.
12. There are a lot of Trump fans in the Western gold community, and I suggest they focus on social media as much as mainstream media, to keep on top of the pre-election action.
13. In regards to the potential for inflation, please click here now. Merrill analysts have just issued a blockbuster report, suggesting that a multi-year supply output squeeze is coming.
14. I think they are correct, and this has significant implications for the price of oil, which is by far the single largest component of most commodity indexes.
15. Please click here now. Double-click to enlarge this eight hour bars oil chart.
16. Oil is coiled in a nice bull wedge pattern, and poised to surge towards the $50 area highs, and perhaps to $53.
17. Some oil bears have suggested that electric cars could put pressure on long term oil demand. I agree, but they will put more pressure on oil companies to cancel new mega-projects.
18. Electric cars will not produce a lower oil price, but, ironically, a higher one! There are many factors working synergistically to drive inflation higher, and oil is certainly one of them.
19. I’m getting a lot of emails from investors who are worried that gold stocks could get hit hard if the US stock market crumbles. Here’s the bottom line:
20. There’s no question that there appears to be more margin used in the gold stocks arena than the bullion arena, at the current time.
21. It’s a different situation from 2008. In 2008, hedge funds were forced to liquidate gold to meet margin calls caused by the OTC derivatives crisis.
22. Now, a loss of confidence theme is brewing, with the focus on central banks and government treasury bonds. That means that institutional money managers are much more likely to buy gold in a market meltdown event. Gold stocks can decline initially if the stock market crashes, but they will soon follow gold, and move higher.
23. Please click here now. Double-click to enlarge this GDX chart. Note the position of the Stochastics oscillator, at the bottom of the chart. GDX is more solid here than most investors think.
24. While the presidential debate received a lot of attention, I’ll dare to suggest that tomorrow’s COMEX option expiry is much more likely to be the catalyst that produces a fresh leg higher for gold, and for stock in the companies that mine this mighty metal!