Are you ready?
Some of the best experts in precious metals who have proven themselves over the last ten years … in the face of blistering media criticism, analyst labeling then “conspiracy nuts” and “the tinfoil hats”…and those wrong about gold having “topped” for years…are now in a general consensus that the next two months or less will see dramatic action in gold and silver. The predictions range from $1700 to 2600 by year end. Martin Armstrong’s breakout upside is over $2200 in August…but the high for his upward channel is $1600 to $1900 by year end. From there over the next year or two the highs are astronomical.
But most smaller gold bugs are interested in where the shockingly under priced gold and silver shares are headed. We are now beginning to see positive action here that is a sign of things to come. The Gold miners Index (GDM), the juniors (GDXJ), the ETFs (SGOL) and many other indicators are screaming for a bottom here and an upside of a potential double by December.
At this time gold has broken out and has had enormous gains from its major support at $1480 since July 1. Be prepared for a pullback before month end…which will create a wonderful buying opportunity for a wild ride up into year end. The big banks short gold (and silver) will take them down yet again for options expiry month end…if they can…which usually starts by the third week in the month…followed by a break out to the upside in the first few weeks of the following month. Whether this repeats again for August is to be seen…from higher levels. But fear not, the junior gold and silver stocks are on their way and the upside potential is now explosive.
Gold is generally trading independently of the $US now which we witness descend into lower levels. Expect this pace to quicken.
But what of silver? The amount of available silver is at record lows, as we witness the COMEX stores decline from over 45 million ounces in Feb. to below 27 million ounces in increasingly short supply at current prices. This market imbalance must be resolved.
The “window of opportunity” for the precious metals is opening much wider as the confluence of multiple gold friendly pressures increases daily…and we have just witnessed gold match its record winning run because of global debt concerns from Greece to Europe to the US. Global currencies are debasing with heightened velocity. As the value of paper decreases in Europe more and more Europeans demand more investment gold. The heightened wave of demand from this area alone will exacerbate the already voracious and growing demand from China, India, ME, Russia, Brazil, and others. Production can not keep up as new, large gold deposits are hard to find. Many, many other factors are also at play. Inflation is growing despite the attempts to hide it. Safe haven demand for gold increases with an almost daily reduction in country ratings by Moody’s and others…they just reduced US credit rating.
Those that do have resource in the ground will be swamped with buyers…some trading at as much as a 70% to 90% discount to their relative values of three to ten years ago. Those that manage the paper price of these stocks will soon have to throw in the towel as competition for those invaluable assets becomes the determining factor.
Long investors in the PM and junior gold stocks have paid the price for admission to one of the biggest events in the history of the precious metals markets.
AGG is worth at least $1/sh to $4 for ounces in ground at this time.