Historically, and based on 35 years of data, gold usually puts in a bottom in March and a top in April. We’ve had the bottom in March (on March 18^th), and we await a top in April.

Three weeks earlier, this same index had shown gold analysts to be in a bullish mode by 61%, and now some 15 trading days later, these same analysts are 16.5 bearish, and advising their clients to be short gold for the time being.

The long-term outlook for gold is very bullish, for to paraphrase Sir Winston Churchill’s famous remark, “never before in history have so many dollars chased so few ounces of gold (and silver)”.* The mountains of currency are rising, while the number of ounces of gold produced by gold mines is dropping.

This article deals with the blatant manipulation that has been occurring in the gold and silver markets, and offers a solution. While this scandal has been going on for many years, at last more and more people are becoming aware that it is going on.

The past few days have seen the domineering short sellers do their utmost to drive the price into the basement, hoping that they might be able to reduce their ‘net short’ position, which had grown quite high. At some point the hedge funds and thinly margined investors run out of gold to sell to them and then the selling dries up. Next, some technical buy signals commence to flash and buyers begin to outnumber sellers again, and this starts the next rising sequence.

It’s amazing how many people out there still do not understand the basic bullish fundamentals of the gold market. Even a large number of analysts are providing their clients with erroneous advice, by telling them to ‘wait for a bottom.’ Many of these clients could well be facing the problem of looking back ruefully at the bottom, long after it is in place.

They read about a member of the Federal Reserve Board who is quoted as saying that he is worried about inflation, and they interpret this to mean that the dollar is going to rise, and gold might fall, just because of that single comment. If the man was serious about his concerns, he and his pals would be raising rates, not lowering them! Of course we know that their hands are tied, as the Fed cannot raise rates until the economy, especially the housing market, can handle higher rates.

The inference is that some of the gold that is supposed to be stored at Fort Knox may not be there, or may belong to foreign governments. The last time this gold was officially audited was 1953.

When people see gold and silver shining brightly amidst the battered economic ruins, they will finally realize that the gold bugs were right all along.

The sub-prime mortgage debacle is nowhere near solved, and we can count on the central banks to do what they do with every problem they run into: print more money.

click to enlarge

This is the daily gold chart. The circles draw our attention to the fact that the last two dips in the price of gold were not confirmed by the three supporting indicators. This is bullish. The red and green dashed lines indicate that the overall uptrend channel was never really violated.

In 2003 I remember reading an article by Douglas Kanarowski titled: “70 forces for higher silver prices”. (To find the article, visit Google and type in his name - the link is at the top of page one). If Mr. Kanarowski were to re-write the article today, he could add several more reasons.

Silver is being utilized more and more in nanotechnology applications. According to a recent report from NanoMarkets, a leading industry analyst firm based in California, the market for silver conductive inks is expected to rise from the current 176 million dollars per annum to 1.2 billion dollars during next 7 years. This is a seven-fold increase!

In this essay we will look for these bells, and check to find out if they are loud enough to excite those investors who like to ‘buy low and sell high.’ After all before we can sell high, we must first buy low!

First, let's go over some fundamentals: