Sunday Evening 6 November 2011
We editorialized about the absurdity of the world government ponzi
scheme being carried out as the value of currency is fast moving
from two-ply to one-ply. [See Silver - Keep Accumulating Physical,
click on http://bit.ly/sBpZ8M] There is no need to repeat it here.
The same said for silver applies to gold...keep accumulating the
physical as the best antidote against world events, doomed for disaster.
The weekly chart is clear, and as a reminder, the higher time frames
tell a truer story of a developing market. The trend is THE most
important consideration for positioning in any market, and the trend
in gold is clearly up. The notion of "spacing" exists when the low of a
then current correction remains above the high of the previous swing
up. The low in January 2011 is above the high of June 2010, and
the low in May 2011 is above the previous high in December 2010.
What spacing indicates is that a trending market is strong, strong
enough that buyers are not waiting for a lower correction, but are
entering the market. In short, it is a sign of a healthy bull move.
Spacing did not occur in the September 2011 washout. All that says
is that the trend was a little weaker, but not over. To support that
view, you can see that the highs have been higher and the swing
lows have been higher, as well, and that is what defines a trend.
There are NO signs of a bubble, and any mention from uninformed
sources, be it overpaid talking heads on financial news networks or
from politically motivated sources can all be discounted. Gold now
caters to a huge global community. India has always been a believer
in the value of gold, and it has also been a huge buyer, by the tons,
as a country. China continues to quietly buy gold at what they see
as really attractive prices, given how countries are going bankrupt
and the world central banks' answer to such overwhelming debt is to
create even more. That is akin to saying the way to solve the crime
rate is to create even more crime...give a drug addict more drugs to
solve the addiction.
Gold has long been considered a store of value throughout man's
history, and it ain't going to change this time around. People familiar
with gold know this. Detractors of gold choose to ignore the factual
past. Let them accumulate as much paper assets and hold fiat to
their heart's content. We all make choices. To tie this thought to an
end, the global take on gold and the growing global demand for it,
ironically, including the central banks that eschew it, will ultimately
lead to much higher levels, and the market is far, far way from any
notion of a bubble in the making.
If there is a bubble to be found, it is in the output of the central banks
creating more and more imaginary "money."
We are of the mind that charts can be misleading, for now, due to
the poiticalization of them and the currency markets, and volume is
unreliable as a consequence. There was a small upside breakout
in price, three weeks ago, once gold rallied back over 1700.
Breaks are being bought, evidenced by the ensuing rallies that do
not allow price to linger long at lower levels, as when 1600 was
reached in mid-October, followed by a fast rally, and another rally
after a correction to the 1700 level at the beginning of November.
That makes it a support level, once again.
Anything can happen in the futures market, more so for silver
than for gold, and that is why we continue to advocate purchasing
physical gold as a wealth builder, and not just a hedge against
inevitable inflation. This market will not be denied. It is a matter of
time, next month, next year? What matters is being long, a month
or a year too early rather than a day too late. Evidence proves this
train has already left the proverbial station and is moving.