Graceland Updates 4am-7am
March 28, 2017
1. I've referred to the price action of gold in 2017 as the "Uptrend of Champions".
2. Please click here. Double-click to enlarge.
3. A short term pause here in the $1255 - $1270 area is likely. A pullback would only add to the already-positive look of the chart, and open the door for a powerful rally to $1315.
4. To understand why a pullback would only add to the solid technical set-up, please click here. Double-click to enlarge.
5. A pullback from the current price area would create a nice inverse bull head and shoulders continuation pattern within the uptrend channel. That pattern would mathematically target the $1343 area highs where gold traded on the night of Donald Trump's election.
6. The Western gold community's initial celebration of the "Golden Trumpster" that evening was turned into a gold price nightmare by the horrific demonetization announcement in India.
7. The good news: With bank restrictions gone, Indians are now free to withdraw unlimited amounts of cash. Most of the world top bank FOREX traders are very negative on the dollar versus the yen, euro, and the franc. The bottom line is that gold is now ready to retake all the ground it lost from the $1343 area highs.
8. I've suggested that the world is on the cusp of a Chindia-oriented "gold bull era", but initially themed more on a period of dollar devaluation in America. That's because there is no solution to the Western world's debt problems other than default or dollar devaluation against gold.
9. China's government has serious debt, but there are still about 300 million rural citizens poised to enter the urban workforce. China's citizens are maniacal savers, and the country can grow its way out of its debt problems, much like America did in the 1950s.
10. Unfortunately, the America of today (and most of the Western world) is demographically the opposite of what it was in the 1950's.There will be no growing out of debt for Western governments or citizens.
11. There will only be fiat devaluation and a very long term decline in the standard of living of the citizens.
12. Please click here. Double-click to enlarge. Oil is beginning to look interesting at the current support zone.
13. Oil stocks may comprise more than 20% of Russian and Chinese stock markets. That's a high number compared to other big markets. A more positive outlook for the price of oil could usher in substantial institutional investment in the stock markets of both Russia and China.
14. Please click here. Double-click to enlarge this quarterly bars long term oil chart.
15. Note the 14,5,5 Stochastics series oscillator at the bottom of the chart. It's massively oversold, and now flashing a huge crossover buy signal. There's also a loose inverse H&S bottom pattern in play. That pattern tends to signal that a major price advance is imminent.
16. Oil is by far the biggest component in most commodity indexes, and institutional money managers tend to buy gold when those indexes rise. That's partly because gold is also a commodity index component, but mainly because they view gold as the ultimate currency hedge against inflation.
17. A major rally in oil would be extremely good news for gold and silver investors around the world.
18. Please click here. Double-click to enlarge. Janet Yellen has (so far) been successful in raising short term rates while keeping long term rates in check.
19. This T-bond chart suggests bonds could pause, and then stage an upside breakout. That fits with the inverse H&S bull continuation pattern scenario I've laid out on the gold chart.
20. Please click here. Double-click to enlarge this spectacular chart of the euro versus the US dollar.Gold has quite a lot of positive price drivers right now, and the euro is one of the bigger ones. A major upside breakout has either just occurred, or is imminent.
21. Please click here. Double-click to enlarge this silver stocks ETF chart. The only thing that gold stock price enthusiasts have to "fear"... is that silver stocks may perform even better than gold stocks.
22. My suggestion: Own both silver and gold stocks. All investor eyes should be on the $36.74 price marker for SIL. Today is options expiry day for COMEX gold and silver options, and an upside breakout for SIL is likely to follow that expiration.
23. Please click here. Double-click to enlarge this GDX chart. Note the immense bullish volume bar that occurred as the Fed hiked rates, creating a dramatic rally in most gold stocks. GDX is nicely poised in a rectangle formation now, ready to begin a fresh surge higher.
24. Because of the fabulous technical, cyclical, and fundamentals in the precious metals sector, investors can expect solid gains over the next 36 months, with most stocks and bullion likely to move to all-time highs. Quite simply, from both a real risk and potential reward perspective, it's the greatest time in history to own the entire precious metals sector!
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