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Stewart Thomson

Stewart Thomson

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…

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Gold Resolutions For 2012

Graceland Updates 4am-7am
Jan 3, 2011

  1. The 2012 phase of the great gold war is underway. Click today's gold chart now, to watch gold start the year in winning fashion. A small band of dollar bug "snipers" sit in the $1600 price zone, but don't expect them to draw much blood from our golden warriors.

  2. Note the solid positioning of the MACD here. The excellent action in gold is being mirrored by silver. You need a solid two month time frame between the two bottoms to have a real double bottom chart pattern. Silver has about three months between the bottoms in place, which is acceptable.

  3. Click this silver chart now. There is definitely double bottoming action on this chart, and silver did not confirm the gold market's move to new lows last week. Note the rising trend of the MACD from the first bottom.

  4. Silver is likely to be subject to strong incoming liquidity flows because this is an election year. Government people want to "juice" the stock markets higher. Silver is an industrial metal as well as a precious metal, and 2012 could see silver mount a very big rally against the dollar.

  5. There is a rumour that William Shakespeare wrote his famous " Much Ado About Nothing " play for gold investors who became paranoid after the triangle formation failed on the gold chart.

  6. There is now a similar triangle pattern on the Canadian dollar chart, only this time it looks like the US dollar is the entity that is set to fall apart.

  7. Click this USD:CAD chart now. Canada's central bank governor has issued several " get ready for some pain " alerts to the Canadian people, and a rising Canadian dollar could be part of the picture he is painting.

  8. There is a perfect symmetrical triangle in place. It has a 2/3 chance of seeing the USD dollar break out to the upside, but early this morning the demand line cracked. It doesn't look good for the US dollar.

  9. I don't think I remember a time in this gold bull market when there were so many gold-positive items in play across such a wide array of markets.

  10. The Financial Times reports, "Hedge funds increased their bets against the euro to a record level in the last week of 2011, increasing pressure on the embattled European common currency as it enters the most testing year of its history." -FT, Jan 3, 2012.

  11. The enormous commercial traders are on the other side of that trade, long the euro, and their stance is another bullish factor for gold.

  12. In the longest term, sadly, you will likely find that the only thing an ounce of gold buys more of than it did at the start of the gold bull market is dollars , and the only use for those dollars could be fireplace fuel . That hard lesson will be learned down the road, and I don't want to rain on anyone's dollars-of-wealth parade so early in 2012. Or do I?

  13. If you want to get richer, you have to buy more gold when it is on sale, and put it on your scale. If the number on your scale is not getting bigger, it is quite unlikely that you will ever get richer with gold.

  14. Jim Rogers said on Dec 28 in a CNBC interview, "If I were buying anything I'd be buying agricultural commodities... "Going forward we're going to have huge shortages of everything - including farmers - I think ag will be a great place for the next 10-20 years.... "

  15. While I own corn and wheat, I'd like you to think more about the implications of a ten to twenty year period of generally rising food prices, and what that situation could mean for gold, silver, and gold stocks.

  16. Click this corn chart now. This is one of the best looking charts in any market, and rising corn prices cause institutional money managers to get concerned about general inflation.

  17. When they get concerned they buy gold and some silver.

  18. The year 2011 saw the destruction of a lot of short term traders. The gold community lost a lot of good people. They liquidated into the lows, which is understandable, especially when you think about the fact that many gold stocks have never recovered to even the 2006 highs.

  19. If you are one of the people who sold out, just stand back this morning. Don't try to chase the gold price higher anymore. The flip trading "thing" is over. We're in a new phase of the gold bull market, and you need a wider view, much bigger trade increments, and a lot more patience.

  20. If you believe this crisis could go on for decades, then it is more an act of sanity than tactical action to embrace wider buy and sell price increments. Make a resolution to tone down the obsession with predicting the next minor trend move.

  21. Click this GDX sell targets chart now. The bottom gold stocks line is that when the price of GDX broke under $50, there "should" have been massive volume, but there was very little capitulation.

  22. Sellers of gold stocks have dried up like dollar bugs baked by a golden sun. If you bought gold stocks into the recent lows, on the upside you should be looking the resistance from the dollar bugs coming into play at about $53.70, $54.80, and $57.

  23. That resistance doesn't mean you sell there. I'd like to see you holding more gold stock for bigger moves in 2012. Just be aware that sellers exist in size at difference areas on the chart, and not every down day in gold or silver is due to gold being "manipulated". You breathe in and breathe out with your lungs. Allow your stocks to do the same thing without you calling 911 every 30 seconds.

  24. The cold reality is that those "manipulating gold lower" recently were only those investors who sold themselves out of it . The banks didn't "manipulate gold lower". They bought as it fell, and if they hadn't, gold would have fallen vastly further. Let's make 2012 the year that you end your personal manipulation of gold and gold stocks, by never again selling out of them on weakness. See you out there, on the gridlines!

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