1. Please click here now.  Double-click to enlarge this daily gold chart.  Gold has traded in a drifting rectangle pattern for most of this year.
  2. Please click here now.  Double-click to enlarge this important weekly gold chart.
  3. The rectangle pattern on the daily chart is part of a huge weekly chart base pattern.  That has been forming for about five years.
  4. Note the enormous increase in trading volume over the past two years.  This is extremely positive technical action.
  5. Trump appears ready to make an announcement concerning US government relations with Iran today.  That could re-open the oil-for-gold trade in Turkey and other countries.
  6. It’s unlikely that anyone in China really cares very much about what the US government announces today, tomorrow, or in the future, and rightly so.
  7. In another five years it’s unlikely that anyone in India will care what the US government does either.
  8. This is the beginning of what I call the China and India oriented “gold bull era”.  It’s an era that is rekindling respect amongst global money managers for gold as the ultimate asset and portfolio returns enhancement tool.
  9. I’m adamant that the correct minimum amount of gold that should be held in a stock and bond portfolio to maximize returns is 20%.  The ideal portfolio may be 30% bonds, 30% stocks, 30% gold, and 10% blockchain.
  10. Regardless, long term precious metals investors should ignore short term market noise and focus on the big weekly chart base pattern for gold.  Note the price targets of $1500 and $1750.
  11. That’s where to book some profits and/or buy put options in expectation of a significant pullback in the price.
  12. Please click here now. Double-click to enlarge this dollar-yen chart.  Another bear market rally for the dollar is nearing completion.  That bodes well for a gold price surge towards my first target at $1500.
  13.  Most analysts claim the dollar is rallying because of rate hikes, but the cold truth is that the dollar has collapsed after almost every recent rate hike.
  14. I’m projecting this trend will continue and likely accelerate.  Please click here now. If investors are racing to buy US bonds to get higher rates, why does this T-bond chart look like something the cat dragged in?
  15. Many investors are indeed buying bonds because of rate hikes, but the Fed’s QT program is countering their buying.  All the mainstream media hype about higher rates and the dollar has produced nothing more than wet noodle rallies for both bonds and the dollar.
  16. It’s just a matter of time before more rate hikes and QT from Jay Powell push the T-bond under my 142 “line in the sand” zone.
  17. When that price zone fails, panic amongst institutional money managers could begin.  That could usher in a substantial new leg down for the US stock market.
  18. “Some investors and institutions may not be well positioned for a rise in interest rates, even one that markets broadly anticipate, and, of course, future economic conditions may surprise us, as they often do.” – Jay Powell, US Fed Chair, May 7, 2018.
  19. I believe the surprising economic conditions that Jay alludes to in that statement are going to be surprisingly inflationary.
  20. On that note, please click here now. Double-click to enlarge this GDX chart.
  21. Many Western gold mining stocks are trading at 1998 prices, and a large part of the problem relates to the deflationary collapse in US money velocity that began in 1995.
  22. A new era of inflation is beginning in the West.  That is going to turn gold stocks into the kind of safe haven that bullion functioned as during the previous 1995 – 2014 deflationary era.
  23. GDX is trading in a tight rough range between $21 and $23.25.  All inflation and bull era enthusiasts should be buyers of GDX and component stocks in this range.  Use put options to manage emotional jitters.
  24.  Aggressive traders can buy a two-day close above $23.25 with an initial target of $25, and this is likely the beginning of a much longer-term move that should see GDX rise to new all-time highs as gold reaches $1750.

Thanks and Cheers,

Stewart Thomson

Graceland Updates

https://www.gracelandupdates.com

Email:

stewart@gracelandupdates.com

Risks, Disclaimers, Legal

Stewart 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 qualified 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:

Are You Prepared?

  1. Will this Friday’s US jobs report be the catalyst that sends gold above the key $1370 resistance zone and ushers in a new era of institutional enthusiasm for gold stocks?
  2. Please click here now.  Double click to enlarge.  The US stock market suffered yet another “cardiac arrest” moment yesterday.
  3. Market breadth has thinned horrifically, and the low rates and QE that have incentivized corporate buybacks have been replaced with rising rates and QT.  That’s akin to replacing a firetruck’s water with gasoline.
  4. I’ve outlined the case for a possible minor rally in April from current price levels, but the market is so weak internally that it is risk of a much bigger cardiac arrest event.
  5. I don’t think Jay Powell will announce a rate hike at the early may Fed meeting, but he might.  If he does, stock market investors should be ready to trade in their “Sell in May and go away” mantra for… “Sell in May after getting blown away by Jay.”
  6. If he wants to do four hikes in 2018 but avoid doing a hike in the September stock market “crash season” month, he is likely to seriously consider doing a hike in May.  Are investors prepared for such a surprise?  If they own lots of gold, the answer is yes!
  7. Please click here now.  So far in 2018 almost eighteen billion US dollars in institutional money has flowed out of the main S&P500 ETF.  This market is very sick, and getting sicker.
  8. The bottom line: US stock market rallies should be sold and the proceeds should be placed in cash, gold bullion, and gold stocks.
  9. Please click here now. Double-click to enlarge this horrifying T-bond chart.  On a day that the Dow Industrials fell more than 700 points at one point, the T-bond could barely rally at all.
  10. Institutional money managers and sovereign wealth funds are beginning to realize that rate hikes and QT are a tremendous headwind to the US government’s ability to finance itself.
  11. During the latest stock market mini crashes, they have clearly started to move their focus from T-bonds to gold. 
  12. As more rate hikes and QT create much bigger and more frequent crash events in the stock market, I expect this institutional interest in gold to accelerate.
  13. Please click here now. Technically, gold’s price action is very impressive.  A small head and shoulders top formation was quickly destroyed with yesterday’s safe haven rally.
  14. Please click here now.  Indian demand for the Akha Teej festival is solid.  It should serve as great support for an imminent surge through upside resistance at $1370.
  15. For an important look at that resistance zone, please click here now.  Double click to enlarge.  Gold is coiling in what I call a bull “super flag” pattern, and seems eager to burst higher in a rally that should carry it to $1425.
  16. What’s particularly exciting is that in addition to bullion, the GDX ETF is beginning to act as a safe haven!
  17. Newbie” investors to the precious metals asset class have memories of the deflationary declines in 2008.  They get nervous when they see the stock market fall, and wonder if gold stocks will also fall.
  18. The goods news for these investors is that the current situation is more akin to the late 1960s or early 1970s than 2008.
  19. Please click here now.  While institutional money is pouring out of stock market ETFs, it’s starting to pour into the GDX gold stocks ETF.
  20. Inflation is on the move, and savvy institutional money managers are moving their safe haven focus from bonds to gold and gold stocks.
  21. Please click here now. Double-click to enlarge this GDX chart.  I’ve urged gold stock investors to be eager buyers of all two and three-day pullbacks.  Aggressive players can buy GDX call options and look for 20% gains on those options as a profit booking target.
  22. For individual stock enthusiasts, the focus should be on the component stocks of the precious metal ETFs that show the best overall performance from 2016 to the present time.
  23. In the 1970s the famous newsletter writer Harry Schultz was known as the “Dean of Gold”.  He promoted the use of two and three-day pullbacks to purchase South African gold stocks.  The current price action in GDX and many of its component stocks is beginning to display an eerie similarity to the price action of gold stocks in the early 1970s.
  24. Gold stock enthusiasts who missed the most recent two-day pullback buying opportunity will have to wait for the next one to get in on the upside fun.  Following that pullback, gold and gold stocks could be ready to surf an Akha Teej themed wave, right through $1370 and on towards my $1425 area target price!

 Thanks and Cheers,

Stewart Thomson 

Graceland Updates

https://www.gracelandupdates.com

Email:

stewart@gracelandupdates.com

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am.The newsletter is attractively priced and the format is a unique numbered point form.  Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

Stewart 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 qualified 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:

Are You Prepared?

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