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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's Long Term Chart

Graceland Updates 4am-7am
May 14, 2013

  1. "India's wholesale price index, the country's main gauge of inflation, rose just 4.89 percent year on year last month - far below expectations for a rise of 5.4 percent - and slower than 5.96 percent rise in March." - CNBC News, May 14, 2013.

  2. Many economists are already predicting that this shocking drop in Indian inflation will lead to further cuts in interest rates.

  3. India's government (aka "The Gman") views imported gold as an expenditure, while the citizens view it as an investment asset. Indian gold imports increased in April, to over $7 billion, and both the government and the central bank claim this surge in gold imports is causing the nation's trade deficit to soar.

  4. On May 13, 2013, the central bank of India announced curbs on gold imports, but today the World Gold Council (WGC) stated that 2013 imports will rise to above 900 tons.

  5. WGC India Managing Director, Somasundaram PR, said in an interview to "The Hindu" newspaper yesterday, "Any attempt to curb import will activate unauthorised channel."

  6. In plain English, India's citizens buy gold, any way they can get it, to protect themselves against government stupidity and theft.

  7. Western bank economist price targets of $1100- $1300 mean absolutely nothing to these gold market champions.

  8. If the average Indian is not afraid of lower gold prices, should you be afraid? The answer is clearly... no!

  9. Every "card carrying" member of the gold community wants to see higher gold prices, and it will happen, but patience is required.

  10. It's quite sad that hundreds of millions of Asians are lined up in the streets to buy physical gold, while many Western gold analysts are doing nothing other than pasting "long term trend is down" annotations on every gold chart they can find.

  11. If the long term trend for gold was down, Asians would not be lined up in the street to buy it. Gold is not a dollar-bug's whipping boy. It's the greatest investment asset in the history of the world, and the only one that should never be sold at a loss.

  12. Long term charts should be used to identify potential buying areas, not to terrify gold investors.

  13. In the shorter term, gold's price moves like an ocean tide. Please click here now. You are looking at the daily gold chart. Gold is trading in a range between $1400- $1480.

  14. Traders should buy a little in the $1400 area, and sell a bit in the $1480 area.

  15. Note the position of my "stokeillator" on that chart. It's not flashing a "run, hide, sell everything!" signal. The stokeillator simply suggests that gold could rest a bit, after rallying about $160.

  16. We all wish the $160 rally was from $1800 to $1960, but it isn't. Cheer for gold, 24-7, but be realistic about the need for rest, after a $160 rally.

  17. Please click here now. That's an even shorter term chart, using hourly bars. Sell-side HSR (horizontal support & resistance) sits in the $1440 area, and buy-side HSR is near $1400. Gamblers can use leveraged vehicles, with some degree of confidence, to trade these shorter term charts.

  18. KIS. Keep it simple. Sell a little paper gold in the $1440 area, and buy physical gold in the $1400 area.

  19. Unlike most gold analysts, my view is that gold stocks can perform well, even if the dollar rallies and gold falls.

  20. The cost of production is in the $1100- $1250 area for many mining companies, and many value-oriented fund managers will want to buy gold stocks in anticipation of those prices.

  21. Please click here now. Double-click to enlarge. That's the GDX daily chart. If you look carefully at each blue box, you'll notice that volume has generally been declining on down days, and rising on up days.

  22. That's a positive sign, but note the red circles that I've drawn on some of the technical indicators and oscillators. In my trading service, I'm short gold stocks now, but in all my other investment accounts, I'm accumulating them.

  23. Trading should always be a small venture. It creates excitement during down markets, and compartmentalizes "action trades", while leaving the much larger core positions alone.

  24. To view my special long term chart for gold, I'd like you to please click here now. A picture speaks a thousand words, and it tells you why the long term target is not $600. It's $6000.

Special Offer For Website Readers: Send me an email to freereports4@gracelandupdates.com and I'll send you my free "Silver Technicals" report. I'll show you why I think a head and shoulders bottom could be forming on silver stocks now, and what actions I'm taking in that market.

Thanks!
Cheers
St

 

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