Graceland Updates: “Pruning The Golden Tree”

Regardless, core positions in the precious metal sector need to be held with an iron fist. Just as a gardener mows their lawn rather than ripping the whole lawn out by the roots, the gold market investor needs to hold large core positions to take advantage of what I call the gold bull era.

1. Over the past week or so, gold and associated assets have rallied quite nicely.

2. Please click here now.  Double-click to enlarge this daily gold chart.

3.  The $1237 price area is a good place to book partial profits on positions bought in my $1220 – $1200 buy zone.

4.   Gold feels quite solid here.  The five and ten day moving averages have turned up.  The 14,7,7 Stochastics oscillator is also flashing a buy signal and moving higher.

5.   Please click here now. The latest COT report was also very positive.

6.   While the rally can continue, smart investors book profit systematically into strength and good news.  So, I’m adamant that some profit should be booked here.  Gold has rallied more than $30 from the $1205 area low.

7.   If the rally accelerates, the wise investor books even more profit.  If it stalls, investors should get a chance to buy again at lower prices… using some of the market’s money rather than theirs!

8.   Gold stocks are not likely to reverse their multi-decade bear cycle against bullion until US money velocity stages a new bull run, but they still outperform bullion on rallies.

9.   My focus in the precious metals market in 2017 has been GDX and individual gold stocks, mainly to prepare for that bullish reversal in money velocity.  The reversal should produce a multi-decade cycle of gold stock outperformance against bullion.

10.        Please click here now. Double-click to enlarge this interesting GDX chart.

11.        I’ve been an aggressive buyer of GDX into the recent $21 area lows, and partial profits definitely need to be booked now.  This chart shows that GDX is bumping up against a significant supply-side trendline.

12.        If the price moves back below $21, that capital can be re-deployed into GDX even more aggressively.  I’m a buyer on every ten cents decline, and a partial seller on 50 cents rallies from my buy points.

13.        This isn’t so much “trading” as it is pruning.  As they grow, lawns must be mowed and hedges must be pruned.  As the price of GDX increases, some profit must also be pruned.  Investors can use my pyramid generator to do that systematically.

14.        Regardless, core positions in the precious metal sector need to be held with an iron fist.  Just as a gardener mows their lawn rather than ripping the whole lawn out by the roots, the gold market investor needs to hold large core positions to take advantage of what I call the “gold bull era”.

15.        Please click here now. That’s a snapshot of recent Indian gold imports, courtesy of Nick Laird.

16.        I’ve stated that the 2013 – 2016 slowdown in these imports should be viewed as a temporary issue.

17.        The imports slowdown created the swoon in gold from $1500 to $1100 and the bigger swoon in mining stocks.  The good news is that the swoon is over.

18.        As Chindian citizens get more wealth, they buy phones, cars, and other gadgets.  They also buy more gold.  Unlike phones and cars, it’s very hard to increase the supply of gold.  The bull era will be created by an ongoing failure of gold supply to meet the exponential demand growth from Chindian citizens.

19.        The price of gold will be driven relentlessly higher from this process not just in terms of price, but in terms of time.  Empires tend to peak after about 200 years.

20.        The relentless rise of the Chinese and Indian gold-oriented empires should move the gold price consistently higher for the next 100 – 200 years. 

21.        The West is in decline, and the decline could become a stagflationary nightmare.  For wealth building purposes, I would suggest that the world gold community should view the decline of the West as very thick icing on a bull era cake.

22.        Please click here now. Double-click to enlarge this exciting bitcoin chart.

23.        I’ve labelled blockchain currencies as the newest and hottest sector of the precious metals family of assets.  Bitcoin gained about $450 just in the past 24 hours, surging from about $1850 to $2300!  I cover the action at  Wealth building enthusiasts can be bitcoin buyers on every $100 or $200 price dip, and “prune the blockchain tree” on rallies of $200 – $400.  I’m pruning mine right now!

24.        As the price of rises more aggressively due to finite supply (my long term price target is $500,000usd), Chinese and Indian bitcoin investors will likely book a lot of profit and use that profit to buy lots of gold.  It’s a win-win situation for the entire global precious metals community.



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