Silver Price Forecast: Silver and the Dow

Silver Price Forecast: Silver and the Dow

 

The Dow making new highs is likely to be very good news for silver investors, because nominal silver peaks tend to come after significant nominal peaks in the Dow. These stock market rallies are driven by the expansion of the money supply, causing a big increase in value of paper assets (including stocks) relative to real assets.

When the increase in credit or the money supply has run its course, and is unable to drive paper price higher; value then flees from paper assets to safe assets such as physical gold and silver, causing massive price increases.

The two most significant nominal peaks of the Dow were in 1929 and 1973. Silver made a significant peak in 1935, about six years after the Dow’s major peak in 1929. Again, in 1980, silver made a significant peak, about seven years after the Dow’s major peak in 1973. So, if the Dow is currently forming a major peak (like I think it is), we could possibly expect a major peak in silver, towards the end of this decade to early next decade. This means we are likely to have rising silver prices for many years to come.

In 1929, when the Dow was making its peak, silver was still in a downtrend which only bottomed in 1931. However, in 1973, silver was already in an uptrend by the time the Dow peaked:

 

Dow vs Silver 70s

The top chart is the Dow from 1966 to 1974, and the bottom one is silver during the same period. Silver was already in an uptrend when the Dow peaked. The Dow made a major nominal peak near the beginning of 1973, with silver peaking about a year after that. Furthermore, silver made a major peak in 1980, about seven years after the Dow’s 1973 peak.

Notice that silver was still trapped within a cup formation (lower than the cup’s high), out of which it only broke out after the Dow peaked.

Below is a current comparison between the Dow (top chart) and silver (bottom chart):

 

Dow vs Silver current bull market

Like in 1973, silver is already in an uptrend long before the Dow’s possible major peak. The uptrend will still be intact, even if price falls further. If the Dow does peak very soon, will we have a silver top close to a year after the Dow’s peak? Also, will we have a major peak in silver coming some years after, like the 1980 peak?

Silver is again trapped within in a cup formation, lower than the cup high. This time the cup is much broader.  Again, can we expect a breakout from the cup’s high sometime soon after the Dow tops – like it did in 1973?

I believe that given the two questions above, the near future of the Dow will be telling for future silver prices.

The Dow’s relationship with the Dow/Gold ratio is highlighting something interesting regarding this current silver bull market compared to the previous two. Below is a 100-year chart of the Dow/Gold ratio:

 

dow gold ratio with Dow nominal peaks

 

In 1929, the Dow peak came at the same time as the Dow/Gold ratio peak; therefore, the nominal peak and the real peak coincided. The 1973 nominal Dow peak came 7 years after the Dow/Gold ratio peak. We are currently almost 14 years past the Dow/Gold ratio peak, and we still have not had a nominal peak in the Dow.

What is this progression in the timing of the Dow’s nominal peak relative to the Dow/Gold ratio telling us? Is this a natural progression or is it proving how increasingly bigger efforts are applied to artificially prop up the stock markets?

Whatever the reason, it has created a setup for a massive financial panic. Value is likely to run from paper assets to silver and gold like never before. While the first part of this collapse of paper assets has been relatively controlled; the last phase is far more likely to result in chaos. This means that the Dow’s collapse could be vicious.

At the same time, after having had a relatively subdued rise since the beginning of this bull market, silver could explode higher like never before, once the bottom is in. The current decline is likely to bring attractive opportunities to increase physical silver positions.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert – hubertmoolman.wordpress.com

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Silver Bull Market Is Following The Structure Of The 70s Bull Market

Silver Price Forecast:

The 70s silver bull took place during a period from a major peak in the Dow/Gold ratio (1966) to a major bottom in Dow/Gold ratio (1980). The silver bull market started in 1971 and ended at the beginning of 1980.

The current silver bull market also started after a major peak in the Dow/Gold ratio (peak was at the end of 1999).The current silver bull market started in 2001, and it is also likely to end when the Dow/Gold ratio makes a major bottom. See the chart below, as illustration:

 

Dow Gold Ratio long term chart showing Silver bull market

In 2011, silver peaked at the $50 level, while in the same year, the Dow/Gold ratio made a bottom just lower than the 5.75 level. Was that the end of the silver bull market? Will the Dow go on to make highs that are multiples higher than the current high, while the silver price collapses?

The major problem with saying that the silver bull market is over, is the fact that the price has not even surpassed the high of the previous bull market. One can only begin to consider the possibility that the silver bull market is over when the price has gone a few multiples higher than the 1980 price of $50.

Until then, we look for a bottom in the silver price, and the next wave higher in this bull market. Instead, consider the Dow as a peaking bull market, with it being multiples higher than its 1973 high (the high of the previous major bull market).

Comparison of the current and 70s silver bull market

On the graphic below, the top chart is the silver bull market of the 70s, compared to the current bull market of the 70s (the bottom chart).

 

Current Silver Bull market vs 70s Silver Bull market

I have tried to line the two charts up; starting from both peaks in the Dow/Gold ratio (it is not exact, but close enough). The two bull markets are definitely following a similar pattern to some degree.

Notice that the first major peak in the 70s bull market came about eight years after the peak in the Dow/Gold ratio. The 2008 peak in the silver price was also about eight years since the peak in the Dow/Gold ratio.

During the 70s, the peak after eight years appears to have been a significant level, since price really accelerated higher, after clearing that peak. Price also accelerated higher when it cleared the 2008 peak, in 2010. The difference this time is the fact that currently we are having a retest of that peak level (which is not necessarily a bad thing).

If price does not go too far below the 2008 peak level ($21), then we have a very bullish looking pattern. The current retest of the 2008 peak level could mean that if we eventually find that bottom, and go higher, we are unlikely to ever see these levels again.

The comparison seems to suggest that the rally we had from August 2010 to April 2011, is just a prelude to the coming major rally. If the current bull market pattern continues to follow the 70s pattern, then we could have a peak in the price of silver when the Dow/Gold ratio bottoms.

We cannot be sure when this will happen, but should it be about 14 years after the peak in the Dow/Gold ratio, like it was during the previous bull market, then we could have a peak in silver at the end of 2013 to the beginning of 2014.

If the current bull market structure continues to follow the basic structure of the 70s bull market, then price should, at least, clear $140.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast 2013: Silver’s Bullish Cup Formation

Silver Price Forecast 2013

The most significant fact about silver, from a charting point of view, is the mega cup pattern formed over a period of more than 30 years.

These cup (or cup and handle) patterns are very bullish formations. Below is a long-term silver chart showing the mega cup formation as well as two smaller cup formations:

silver price forecast

When a cup is formed, it is often an indication that the price will eventually go higher than the peaks of the cup. This is why the mega cup formation is so significant, because it is telling us that the price of silver will eventually go higher than the $50.

For all the cups shown on the silver chart, gold had a similar cup. The main difference between the gold cups and silver cups is the timing. See a similar chart for gold:

gold price forecast

In all three cases, the gold price went higher than the top of its cup before silver did. This means that gold was a leading indicator for the price of silver. In the case of the mega cup, silver has still not gone higher. Based on the fact that silver has always followed gold’s path by eventually going higher than the cup’s high, in the past, it is very likely that silver will do it again by going higher than the $50.

This is a very simple principle, but provides an enormous opportunity to those who are willing to buy physical silver and have the patience to hold on to it no matter how volatile the price swings.

The fact that we have such a big cup is what makes timing the breakout of the cup so difficult. I believe we have come close to the point where the silver price is about to challenge the cup’s high, and eventually breakthrough (more detail coming to premium subscribers only). First though, it has to make the low for the current decline.

On the charts above you can see that during the 70s, silver always went higher than its cup in the year following gold’s similar feat. It has already been more than three years since gold went higher than its cup high. Silver has still not gone higher; however this is reasonable considering the fact that the cup is so much bigger than the 70s cups.

Previously, I have written about how conditions are similar to that of 1973, when the Dow started a crash at the same time that gold started a spectacular rally. That was incidentally the year that silver also started a massive rally, and went higher than the cup formed before that.

Below is a silver chart showing price action around a cup of the early 70s:

silver price forecast

I have indicated a cup that was formed during the late to early 70s. Note that the gold chart also made a similar cup during that time. Early 1973, about the time when the Dow started its crash, silver was still trapped lower than the cup’s high. However, by 1973, the gold price had already gone higher than the cup’s high. In the same year silver went higher than the indicated cup’s high, eventually peaking multiples higher than the cup.

This is similar to today’s situation, with gold having already gone higher than the $850 area, and silver still lagging lower than the $50 area. This would suggest that the peak in the stock market (which I believe is busy happening now) will be the significant signal for the coming silver rally towards and beyond the $50 level.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold & Silver Forecast 2013: On the Verge of a New Monetary Order and Gold’s Rise

Gold Forecast 2013: On the Verge of a New Monetary Order and Gold’s Rise Silver Forecast 2013

The last three major bull markets of the Dow were followed by some type of economic crisis and a major bull market in gold. This is no coincidence, since these massive bull markets have been mostly driven by the huge expansion of the money supply. When this expansion of credit is exhausted, which always happens, the confidence in all things (like stocks) inflated by this expansion of credit fails, causing a massive economic crisis and a rush to gold.We are still in the midst of last one’s crisis.

It is the Dow’s last two bull markets that are of interest due to the significance, of how they relate to the current monetary system. In 1944 a new global monetary order was established with the Bretton Woods agreement. The world had just come out of the Great Depression, and was completing the Second World War.

The creation of the new global monetary order as well as the new world order that came as a result of the war was indeed a fresh start. The Bretton Woods system brought about an international basis for exchanging one currency for another. It also led to the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank).

The member states tied their currency to the U.S. Dollar which was in turn pegged to gold at a rate of $35 per ounce. The U.S. Dollar became the world’s reserve and premier currency. The Dow had just started a bull market, and it was with this new created order that it would rise to new highs.

Below is a comparison of the two Dow bull markets since the beginning of the global monetary order created in 1944 (charts from Yahoo Finance):

 

Comparison of Dow Bull Markets

The top chart shows the Dow from 1980 to 2013, and the bottom chart shows the Dow from 1944 to 1982.

The Bretton Woods agreement was in full use during the majority of the first bull market. It was altered only in 1971, when the link between the dollar and gold, at a fixed $35 per ounce, was severed. Also, by 1973, the fixed exchange rate system created by the Bretton Woods Agreement became a floating exchange rate system.

During this bull market (1944 to 1970s) interest rates were rising, until it peaked in 1981. The Dow rose 7.5 times in value from 1944 to 1973. The gold bull market started toward the end of the Dow bull market, taking gold from $35 to $850 in 1980 – a 24 fold increase.

The second (of the last two) bull market started at about 1980, and took place during a time of falling interest rates and an altered Bretton Woods Agreement. With more favourable conditions than the previous bull market, the Dow was able to rise 18 fold from 1980 to the current high.

Gold’ high of $1920, for this bull market is 7.68 times the low of $250.Will gold have a more significant increase compared to its 24.8 fold increase, due to the fact that the Dow’s increase was more than its previous bull market increase? Furthermore, will gold increase more it did during the 70s, given the fact that the conditions for the current bull market (especially as regards to debt levels) are far more favourable. If gold only matches its 1970s bull market increase, it could go to $6 200 ($250*24.8).

Consider that the Dow had a fairly steady rise throughout its entire bull market (that started in the 40s), whereas the gold price rose violently towards the end of its entire bull market of the 70s, with a parabolic blow-off top. See chart, below:

Comparison of Dow and Gold Bull Market

This indicates the likelihood that we are still missing a parabolic blow-off before we can call the end of this bull market; a type of rally that doubles the price of gold, as a minimum, during a 6-month period.

This cycle since about 1944, started with the creation of this global monetary order, and will likely end with the collapse of it. In fact, 2014 will be exactly 70 years since the creation of this dishonest system. We might have a perfect cycle of judgement, if the current monetary order collapses next year. Due to the imminent threat of collapse, it is essential to be invested in physical gold, since it is the perfect alternative to the current monetary regime.

It appears that we are on the verge of the worst part of this crisis. Our attention has to be on the stock markets. When the Dow reaches that “tipping-point” it will signal the start of the end. Previously, I have shown how it appears that the Dow is coming to that critical point.

There is a major risk aversion coming, and in the short-term this is likely to put downward pressure on gold. However, gold will find a footing, and will be driven higher by this very risk aversion. In other words, there is a deflation coming, and gold will prove to be the currency of choice.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold and Silver Forecast 2013

Gold & Silver Forecast: Possible Target For The Bottom In Gold

Gold Forecast 2013 - Silver Forecast 2013

The recent drop in gold and silver is not critical to buyers of physical metals. Instead, it is an opportunity – to buy more at lower prices; at worst, it is an irritation, since it means a longer wait. It would likely be critical only if the gold bull market is over, and prices do not rise higher than the 2011 highs for many years.

If you are buying paper gold (especially leveraged), then a drop like the current drop is likely to be critical. On top of that, the ride is almost guaranteed to remain painful, even if gold moves to $5000 over the next 2 years, due to extreme volatility.

It is important to try to identify good opportunities to buy more gold and silver (at the lowest prices), and to stay invested, for the most part of the bull market. This is what my premium service focuses on. Selling would only become an issue when the bull market is at an end (close to the top).

So, has the gold bull market come to an end?

In my previous article, I have provided an analysis of whether I think this gold bull market is over or not, using the relationship between the Dow and gold. Based on that analysis, it is unlikely that both the Dow and gold are going to make new significant all-time highs from here. We, therefore, have to decide whether it is equities that will continue a bull market from here, or gold.

Gold

Let’s look at gold patterns to see if we can find a possible level for the bottom. Below is a 7-year gold chart:

The first thing I would like to point out is the fact that a drop to the $1000 is possible. I do not believe that it is probable, however. If it goes to $1000 level, then it is unlikely that it will go there soon, as part of this drop. It would probably take a couple of years to get there, in such a case.

What is interesting; however, is the fact that if gold does a bottom similar to 1976, it would go to around $1000. That is a 60% decline of the move from the bottom of this bull market ($250) to the top at $1920.

Note that a drop below $1000 would probably mean that the gold bull market is over.

A bottom of $1300 is the call that I am going with. It is consistent with where I think the gold market is. I believe we are close to a major rally, very similar to the 1973 and 1979 gold rally. If this is the case, then there should be a very bullish pattern present on the gold chart.

The patterns that I have highlighted in red are the most bullish patterns I know. It is not a conventional pattern like those seen with traditional technical analysis. Based on the standard dimensions of this pattern, we should get an ideal bottom at $1300. If gold does not go lower than the $1300 level, over the next couple of weeks, then this pattern could be valid. If the pattern is valid, then gold will rally like it did in 1973 and 1979.

Also, I believe that the drop below $1522 is still part of the consolidating pattern since 2011, and not a break-down of that pattern. In other words, it is similar to the 2006/2007 and 2008/2009 consolidations, but with its major low right at the end, instead of at the beginning or close to the middle.

The $1300 level also represents a 50% retracement of the move from the $680 level in 2008, to the top at $1920. This is similar to the retracement we had in 1973, before the big rally.

There are some other indicators that suggest that we are close to the bottom, which I will share with my subscribers.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold and Silver Forecast 2013

Gold & Silver Forecast 2013: Like 1973, Dow’s Decline To Bring Massive Gold Rally?

Gold and Silver Forecast 2013

For gold to rise to levels significantly higher than the recent high of $1920, a new impetus is needed. Without additional energy from such an impetus, gold could just trade sideways for a very long time, or even fall further.

There is only so much value in the world economy, and it is split between all the different instruments (like gold, silver, stocks bonds, etc.) where value resides.

For gold (and silver) to rise significantly, relative to other instruments of value, value will have to be diverted away from those other competing instruments. The Dow, in particular, has been the biggest obstacle to a rise in precious metals, due to it sucking up most of the available value on global markets.

It is for this reason that the direction of the Dow is an important indicator of where gold will go over the next months. Analysis of the Dow itself, as well as, the Dow/Gold ratio is therefore, essential.

Dow/Gold Ratio

Previously, I have illustrated how, since the 1930’s, the Dow/Gold ratio level of 10 has been a pivotal point from where either the gold price rose significantly or the Dow. On Friday, the Dow/Gold ratio again hit that important level of 10.

The question, therefore, is whether it is gold or the Dow that will significantly rally from around this area? Below is a long-term Dow/Gold ratio chart:

I have drawn a yellow line at the 10 level. In 1995, when the ratio moved away from the 10 level, it was higher, and it was the Dow that started a massive rally. It was in 2008 at the end of the gold correction that the ratio hit the 10 level again.

It is almost certain that this ratio will move significantly from here, and in my opinion; it is gold that is heavily favoured. Technically, it appears that at the end of 2008 the ratio dropped lower than the important level of 10, which acted as some kind of support level. It is now busy completing the retest of that breakdown, and should the area around the 10 level hold; it will likely go into a free-fall (that is much lower than 10).

Dow & Gold

The Dow has just recently made an all-time high, and to many, it might appear that this is a start of a multi-month rally. However, the enormous debt-levels will virtually ensure that this rally is brought to an abrupt end very soon.

The Dow is making similar patterns to that of the 70s except for debt levels relative to GDP being much higher today than that of the 70s. Those patterns also indicate that the Dow’s current rally is likely to come to an end, leading to a possible crash.

Below, is one of the comparisons between the current period and the 70s, I have done for the Dow:

Dow 70s

Dow current

The top chart is the Dow from 1968 to 1974, and the bottom one is the Dow from 2008 to April 2013. I have illustrated how these patterns are alike by marking similar points from 1 to 6. If this comparison is valid, then the Dow could top very soon and start a severe decline.

The problem is that it is impossible to predict the exact level or time where the Dow will top. However, there is a good chance the top could be in this month; given the fact the Dow/Gold ratio has reached that important 10 level.

If we do get the decline in the Dow, similar to the 70s pattern, then it is possible that it could be much more severe than that of the 70s due to the extreme debt levels today. During that massive Decline of the Dow, gold actually did very well. See chart below:

gold vs dow 1970s

I have compared the gold chart (top) from 1970 to 1975 to the Dow chart (bottom) for the same period. From the beginning of 1973, the Dow started a massive drop, while gold started a huge rally.

Today, gold is in a similar position to that of the end of 1972 to the beginning of 1973 (point 1). Then, the price was in a consolidation that started when gold reached an all-time high of $70 (point a). While gold was getting near the end of its consolidation, the Dow was making all-time highs just like today – see point 1.1.

I am sure many were thinking that the gold price would decline back to the $35 level, while the Dow’s rally continues. That did not happen; in a similar manner, gold will likely not decline much further.

I do not know at what level the gold price decline will stop, but it is likely to be very soon, and it is likely to turnaround in a dramatic fashion. Just like in 1973, the gold bull market is not over. There are a few important signals that will confirm the coming rally in gold and silver. I will be sharing more relevant information regarding these markets with my subscribers over the next couple of days.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Forecast 2013

Silver Price Forecast 2013 and beyond: Is Silver Fast On Its Way To $50?

Silver Price Forecast 2013: Is Silver Fast On Its Way To $50?

By Hubert Moolman

There is not just a similarity in how gold and silver trade at the same time period, but also how they trade at similar milestones, despite the fact that those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone. The 1980 peak for both gold and silver is definitely an important milestone. For this 1980 milestone, gold is undoubtedly the leading indicator (since gold has already passed its 1980 high), so it could help us to project what silver might do around this milestone.

Market conditions often cause silver to fall behind gold, for quite some time, where after, silver normally catches-up in a big way. The fact that silver is still caught-up in a trading range lower than its 1980 high, at least four years longer than gold already, provides a classic opportunity for silver to follow that “catching-up pattern” and zoom to multiples of its 1980 high. In my opinion, silver will do just that and move much faster than gold in percentage terms, over the next months.

With gold having passed $1700 (twice the 1980 high of $850) already, given the above analysis, it stands to reason that $100 (twice the 1980 high of $50) silver could be virtually guaranteed.

Below, are two charts that show how gold and silver reacted before and after again reaching their respective 1980 highs:

Gold and silver made similar patterns before and after reaching their respective 1980 highs. From the charts, you can see there is a similarity in how gold and silver approached their 1980 high. Both made a triangle-type pattern just before they reached their respective 1980 all-time highs. When price came out of those triangle patterns, it rallied strongly to the 1980 highs, which started the formation of flag-type (pennant) patterns.

Gold passed its 1980 all-time high during 2008, while silver is yet to do so. By looking at the pattern of how gold passed its 1980 high, we can predict how silver might do it as well. If silver continues to follow the pattern that gold formed, then we can expect a massive spike towards the $50 and beyond, very soon. We are very likely in that move to $50, given that the silver price has broken out of the pennant to the up-side. My  long-term silver fractal analysis report  provides more details on what levels silver is likely to reach over the next years.

The $50 level can be compared to the water level, when you hold a beach ball under water and it starts moving upwards. When it passes the water level, it will move faster since it will now only have air as resistance, instead of water.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to premium service.

Hubert

http://hubertmoolman.wordpress.com

Silver Price Forecast: The Great Silver Chart

Silver Price Forecast: The Great Silver Chart

A reader asked me to update a previous long-term silver chart of mine. Below, is the updated long- term chart for silver:

 

silver chart analysis

Since the last chart, silver has broken out of the pennant formation (on the short-term chart), and is looking really good.

On the chart, I have highlighted two fractals (or patterns), marked 1 to 3, which appear similar. What makes these two fractals so special, is the similarity of the circumstances in which they exist.

There was a significant peak in the Dow (1973 and 2007) between point 1 and 2 of both fractals. Also, point 1 on both fractals represents a significant bottom for silver after the peak of the Dow/Gold ratio.  After point 2, on both fractals, the oil price made a significant peak (1974 and 2008), about 8 years after the peak in the Dow/Gold ratio.

Thanks to this similarity in events, as well as the similarity in sequence, I was able to identify the great possibility for significantly higher silver prices, back in October of 2010. This was a very clear signal that higher silver prices were coming, and that is exactly what we got, when silver moved to $49. However, this run is not over yet. The move from $17, when silver broke out of the triangle (at point 3 of the second fractal) to $49 was just the first part of the move. In my opinion the biggest and best part of this move is still ahead. In my long-term fractal analysis report on silver, I have presented a lot of technical and fundamental evidence to support my opinion for higher silver prices over the coming years.

Based on the fractals on the chart, we could still have about two years before we could get a top like we had in 1980. That is 14 years after the Dow/Gold ratio top (beginning of 1966 to the beginning  of 1980 vs the end of 1999 to the end 2013).

It is interesting to note that the peak in silver (beginning of 1974) after the peak in the Dow/Gold ratio (beginning 1966) came about 8 years after the Dow/Gold ratio peak. On the current pattern, the 2008 peak in silver was also about 8 year after the Dow/Gold ratio peak at the end of 1999.

With the first peaks after the Dow/Gold ratio top taking the same amount of years, what are the chances that the second peaks will also correlate, giving as a top in silver at the end of 2013 to the beginning of 2014?

Also, from a price point of view, there is also an indication that this move is not over yet. If the two patterns indicated continue their similarity, it would be reasonable to expect the final top of the current pattern to at least go higher than $140 as a minimum. Why? If you measure the price movement from point 1 to point 2, in the first pattern, and compare it to the price movement from point 4 to 5, in the first pattern, you will find that the movement from point 4 to 5 is at least 7.6 times larger.

Currently the movement from 4 to the $49 in April of 2011 is only about 1.65 times larger than the movement from point 1 to 2. If it follows the first pattern, and grows at least 7.6 times larger, it will comfortably pass $140.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast – Silver Premium Update August 2012

Silver Update

By Hubert Moolman

The silver chart has formed a big pennant like that of the gold chart. What this indicates is that the silver price will likely make a massive move soon. Technically, this move can be up or down. Note that this update is from my premium service originally published on 6 August 2012.

Below is a silver chart with the pennant:

The technical and fundamental evidence that I have collected, and look at, tells me that the price is likely to go upward out of this pennant formation.

On the chart above, you can see that the price has actually broken out (upward) of the pennant. We have to give it some time before we can say that it is a valid breakout. Also, I have drawn a blue line, which could become another area of resistance.

If we were to consider a move down, then a first target of $15 and one lower at $5 would come into play, based on the patterns. A price of $5 (and even $15) does not make any economic sense, given the amounts of fiat money currently available.

However, there is a real threat of deflation, currently, and the effect of this has to be considered when looking at the future silver price. In my opinion, we do have a perfect setup for a massive deflation which will destroy a lot of debt-based value.

Stock market values have been driven for years by this debt-based value, and will, therefore, be very badly devalued. Many believe that such a fall in stock market values will take down the silver price. I do not agree, and have given many reasons why.

Here, I would just like to point out that the current threat of deflation is due to the massive debt levels, and the inability to service those debt commitments. You can just look at the example of Spain or Greece.

Silver is a real store of value and that is its most significant function. The current crisis will cause a massive rush to that which can store value that will not be destroyed by the debt-collapse. Silver is just about the opposite of debt.

Previously, I wrote about how this debt-based monetary system has created what I call a “mirror-effect”, whereby, silver (and gold) is pushed down in value, to a similar extent as to which paper assets such as general stocks are pushed up in value. This mirror-effect clearly shows up on the long-term charts of gold, silver and the Dow.

Below, is a long–term silver chart (real and nominal) from 1850 to present (generated at minefund.com):

I have drawn a vertical red line, approximately where silver was demonetized (1870s). Notice how the real price of silver collapsed after the red line, from about $30, until it bottomed in 1931 at $4.29. It then traded side-ways (from the big-picture view) for many years, until it spiked from about the early 1970s, making a peak in 1980, where after, it bottomed again in 2001.

Technically, the bottom in 2001 was the completion of what would be a remarkable double bottom reversal, with the first bottom being in 1931. After a double bottom formation, there is often a big rally, and that is exactly what happened next. If this pattern continues to follow the pattern of a valid double bottom, it will reach levels that will exceed the 1980 high by at least one multiple, but probably by many more.

The interesting thing about this possible double bottom is the fact that the two bottoms came 70 years apart. This 70 years period also appears on the long-term Dow chart. Below is a Dow chart (from stockcharts.com) from 1900 to present:

On the chart, I have indicated a 70 year period from when the Dow peaked in 1929, to the peak in 1999. The reason for using the 1999 peak instead of the 2007 peak, is the fact that the 1999 peak represents the real peak, since the Dow/Gold ratio peaked in 1999 (like it did in 1929).

Notice the dates of the peaks and how they fit in with that of the bottoms of the real silver price, as well as the similar 70 year periods between. In my opinion, the occurrence of the 70 year period on both charts, in the context as explained above, provides additional evidence of the link between silver’s demonetization (or suppression) and the massive debt bubble of this century – as explained in part 1 of this article.

While the Dow is inflated to the peak in 1929, silver is suppressed to its low in 1931. And again, the Dow is inflated to its peak in 1999, while silver is suppressed to its bottom in 2001.

So, the peaks and troughs, as presented in the above charts, are the manifestation (in visual form) of the debt-based monetary system causing paper and related assets to rise, while suppressing silver. Another way of looking at it is that the debt-based monetary system is fuelling speculation in paper assets by using energy diverted from precious metals.

Silver (like gold) stands in direct opposition to the current monetary system (they are inescapably linked). The fall (and falling) of this system is the rise of silver as money; therefore, massive increases in what silver can buy in real terms.

Looking at a bearish pattern to find critical levels

Below, is 6-year chart of silver, highlighting bearish fractals:

I have highlighted two fractals by indicating 4 similar points on both. Based on this comparison, we could now be at a very critical area. A break-down below the support (about $26), could mean that the current pattern could follow the 2007/2008 pattern, and take price much lower. This is presented not because I believe that price will break lower than the support, but to show why I think we are at a critical level, and why we should be watchfull.

Pattern Previously Covered

Here, is a follow-up on my previous article about the similar flag-type formations on the silver chart.Below is a graphic which compares the current pattern on silver (from about the beginning of 2011 to present) to a 2007 pattern:

This comparison is still very much valid; only if price goes lower than $26 could it become invalid. In fact, there is a good chance that price has broken out to the upside.

On both charts, I have suggested how the flag patterns might be similar, by marking similar points, from 1 to 6 (and alternatively from a to h). Based on this comparison, it appears that the silver price might now have found that point 6 or h (at the end of June), and is about to increase significantly.

We could be at very volatile area due to the possible breakout, since this is often the case after a breakout – so be aware! I am of the opinion that silver should make its move higher between now and the end of this month, if this comparison is to be confirmed.

Follow-up on Gold/Silver Ratio

In my last gold update, I covered the Gold/Silver ratio, and explained why I think the Gold/Silver ratio will soon fall straight down. Below is an updated Gold/Silver ratio chart:

On the chart I have indicated a trading channel in which the ratio has been moving for the last five months. It appears now to have finally broken down, out of the channel. This could be a very strong signal that silver and gold prices are about to rise significantly. Again, here we have to watch for a possible retest of that break-down area, before the ratio falls straight down.

Conclusion:

Silver appears to have broken out of the pennant or flag-type formation, and could now finally be setting-up for a massive rise in price. We should, however, be very watchful, due to the fact that we are at a critical area in price and time. There is a big threat of deflation, but, in my opinion, it is this very deflation (brought about by the collapse of the debt bubble) that could be driving silver prices higher.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

http://hubertmoolman.wordpress.com

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Dow To Crash Soon?

Alternative Fractal on Dow Chart – this and the previous fractal suggest Dow to crash soon…

For more on silver and gold see my latest premium update (Premium Service).

For long-term guidance on gold and silver, see my Long-term Silver Fractal Report  & Long-term Gold Fractal Report  .

Silver Price Forecast: Silver Could Preserve More Value Than Gold

Silver Offers A Golden Opportunity To Convert Soon To Be Destroyed Value

By Hubert Moolman

11 June 2012

The fundamentals for silver and gold are very strong, and with all the massive bailouts, which are increasing debt levels, they are just getting stronger. Until a significant portion of these debts is repaid or defaulted on, it would be foolish to talk about a top in precious metals.

The repayment of debt (or default on debt – which is more likely) will result in significantly reduced economic activity. Significantly reduced economic activity will have a negative effect on the stock market, which in this case, will likely result in a huge crash. It is these conditions (a deflating debt bubble) that will drive gold and silver prices significantly higher.

Why? Because this will not just be a normal type of reduced economic activity, but one in which the monetary system as a whole is questioned or collapses (due to the excessive debt levels).

 In a crisis like this, it will be all about preserving value, which will make gold and silver the most wanted goods. The excessive debt levels we have currently, mostly represent artificial value, or value that will never be realised. We now have a great opportunity to convert that soon to be destroyed value into real value, by buying gold and silver, with fiat currency.

In my opinion, silver bullion presents the better opportunity, when compared to gold. Silver bullion is still trading much lower than its 1980 high, and also at relatively historic lows against gold.

Silver Flag

Here, is a follow-up on my previous article about the similar flag formations on the silver chart. Below is a graphic which compares the current pattern on silver (from about the beginning of 2011 to present) to a 2007 pattern:

On both charts, I have suggested how the flag patterns might be similar, by marking similar points, from 1 to 6 (and alternatively from a to f). Based on this comparison, it appears that the silver price might now have found that point 6 or h, and is about to increase significantly. See my latest video on my website for more details of this analysis.

For more silver and gold analysis and guidance, see my Long-term Silver Fractal Report or subscribe to my Premium Service.

Warm regards,

Hubert Moolman

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Silver Offers A Great Opportunity

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver.

Warm regards and God bless,

Hubert

(gold and silver newsletter)

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Dramatic Turnaround For Silver?

Silver price Forecast: Dramatic Turnaround For Silver?

18 May 2012

Here are a few patterns that might explain the current state of the silver price, as well as, provide the possible way forward.

Below is a 6-year chart of silver (all charts generated at fxstreet.com):

silver price forecast

On the chart, I have indicated two similar patterns (marked 1 to 5).This comparison suggests that silver could rise significantly over the next couple of months. This would mean that a dramatic turnaround in the price of silver is coming (it might have started already).

I have also drawn some red lines at the $10, $20, $30, and $50 level. These levels appear to have acted like key levels, where the price of silver has found support or resistance.

The interesting thing about these levels is the fact that they have a Fibonacci relationship. That is a ratio that is similar to the following Fibonacci numbers: 1, 2, 3, and 5. So, if the silver chart continues to follow this Fibonacci pattern, which is often the case, then the $50 level is a very important resistance. Also, if we go past the $50 level, then $80 could be the next significant level, since that will be the next area, if the Fibonacci ratio is to be applied. The $80 area could act as a support or a resistance.

Now, I would like to zoom-in to the last part of both patterns (about point 3 to 5 of both).

Below is a graphic which compares the current pattern on silver (from about the beginning of 2011 to present) to a 2007 pattern:

silver forecast

On both charts, I have suggested how the flag  patterns might be similar, by marking similar points, from 1 to 6 (and alternatively from a to f). Based on this comparison, it appears that the silver price is searching for that point 6 (or point f, which might be in already).

These patterns suggest that the current flag pattern (as previously suggested), is important for the future of the silver price. A breakout at the resistance line of the flag could mean that we will have a significant rally, and an eventual breakout at the $50.

For more silver and gold analysis and guidance, see my Long-term Silver Fractal Report  & Long-term Gold Fractal Report    or subscribe to my Premium Service.

Warm regards,

Hubert Moolman

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast : Silver Market Update

Silver Price Forecast : Silver Market Update

Here are a few patterns that might explain the current state of the silver price, as well as, provide the possible way forward.

Below is a graphic which compares the current pattern on silver (from about the beginning of 2011 to present) to a 2007 pattern:

On both charts, I have suggested how the patterns might be similar, by marking similar points, from 1 to 6 (and alternatively from a to f). Based on this comparison, it appears that the silver price is searching for that point 6 (or point f). Previously, about more than 6 weeks ago (after the middle of March), I thought that point 6 (or point f) was already in, or close to being in.

This was my assumption, based on timing: On the 2007 pattern, you can see that from point d to point f was about 10 days, and that this was the same for point f to point h on the same pattern. When applying this to the current pattern, it was expected that point h would be in about 14 weeks after point f (about middle to end March) – similar to the 14 weeks from point 2 to point 4.

This was a reasonable expectation since the market often behaves in such a manner. However, it was the wrong expectation. It appears that the market has extended that cycle (which is not unusual); however, it appears that the bullish expectation is still very much justified. We would need a turnaround very soon though, to continue the mega bullish expectation. If we do not get the turnaround very soon, then price could go even lower than $26 (unlikely).

In my latest gold update, explained why I think this week might bring the bottom for gold. My analysis for silver also suggests that we could see a bottom for silver this week (for the latest next week).

I believe that it is very likely that we will get that massive rally soon.

For more silver and gold analysis and guidance, see my Long-term Silver Fractal Report  & Long-term Gold Fractal Report    or subscribe to my Premium Service.

Warm regards,

Hubert Moolman

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold Price Forecast: Premium Gold Update

Gold Price Forecast: Gold Update

Here are a few patterns that might explain the current fall in the gold price, as well as, provide the possible way forward.

Below is a graphic (all charts are from fxstreet.com) which compares the current pattern on gold (about July 2011 to current) to a 2007 pattern:

On both charts, I have suggested how the patterns might be similar, by marking similar points, from 1 to 6. Based on this comparison, it appears that the gold price is searching for that point 6.

The bullish expectation is still very much justified. We would need a turnaround very soon though, to continue the mega bullish expectation. If we do not get the turnaround very soon, then price could go even lower than $1500.

The following graphic suggests that we could see a turnaround very soon. Below is the last part of the patterns presented in the above graphic (note that the current chart is weekly chart, while the 2007 is daily):

gold forecast 2012

On both charts, I have suggested how the patterns might be similar, by marking similar point, from 1 to 3. Based on this comparison, it appears that the gold price is searching for that point 3. The market, however, appears to have played a trick, which provides the possibility of an alternative comparison. The alternative comparison is indicated by point A to G on both charts. Notice that from point C to G, the chart appears to be rising on the 2007 chart, while falling on the current chart. This explains the reason for prices going lower than I expected.

Both alternatives suggest that the gold price is searching for that final point before starting a rally. However, what this comparison also suggests, is that from a timing point of view, point 3 or point G could be in soon (as soon as this week). On the 2007 pattern, from point 1 to point 2 was about 8 days, whereas from point B to G was about 9 days. If we apply the same ratio to the current pattern, then point G could be in on day 50.62. Today is day 50 since point B, so we are there or almost there.

If we do not get the turnaround rally soon, it could mean that we will go much lower than current levels. For now, I believe that it is more likely that we will get the rally soon.

For more silver and gold analysis and guidance, see my Long-term Silver Fractal Report  & Long-term Gold Fractal Report    or subscribe to my Premium Service.

Warm regards,

Hubert Moolman

For more silver and gold analysis and guidance, see my Long-term Silver Fractal Report  & Long-term Gold Fractal Report    or subscribe to my Premium Service.

Gold/Platinum Ratio And The Coming Depression

During the gold bull market of the 1970s, the Gold/Platinum ratio was in a significant uptrend. It went from about 0.2 to 1.4 over a 12-year period. That is a seven-fold increase. At the start of the current gold bull market (2001), the Gold/Platinum ratio was just a bit higher than 0.4. If the ratio was to emulate its performance during the last gold bull market, it could reach 2.8 (that is gold being 2.8 times the value of platinum).

Similar conditions to that of the 70s, which propelled gold and other commodities higher during the 70s, are present now. However, this time, due to the current higher debt levels relative to GDP, compared to that of the 70s, conditions are more in favour of gold than commodities like platinum (that are more reliant on economic activity).

In the chart below, you can see that debt levels relative to GDP were much lower than it was during the Great Depression, as well as what it is currently.

US Debt to GDP ratio

 

What this is telling me, is that we are going to have conditions that are more like the Great Depression, for the remaining part of this gold bull market. The economic decline, which will mainly come as a result of the debt bubble bursting, will negatively affect a commodity like platinum, when compared with gold.

Although commodities, like platinum, will outperform most asset classes over the next years, they will still depreciate significantly as compared to gold (and silver).

Gold/Platinum Ratio suggests much higher gold prices are coming

There is an interesting pattern developing on the Gold/Platinum Ratio. This pattern is similar to a pattern on the silver chart. Below, is a graphic which features the Gold/Platinum Ratio chart (top) as well as the silver chart (bottom) (charts courtesy of stockcharts.com):

 

gold platinum ratio similar to silver chart

The graphic is self-explanatory, and indicates that the Gold/Platinum Ratio is in a position similar to where silver was at the end of January 2011. If the ratio was to continue to follow the silver pattern, then we could have gold being 1.7 times the value of platinum in this year. This is consistent with my expectation of a significantly higher “real’ gold price (relative to stocks and most commodities).

Note, that it is more probable that an increase in the Gold/Platinum Ratio would mean higher nominal gold prices, instead of lower gold prices. This is due to the fact that the recent decline in the ratio corresponds more with the correction in the gold price, since September of last year.

For more of this kind of analysis to help you navigate the financial markets, subscribe to my premium service .

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved.”

Gold/Platinum Ratio Suggests Much Higher Gold Prices Are Coming

Gold/Platinum Ratio suggests much higher gold prices are coming

There is an interesting pattern developing on the Gold/Platinum Ratio. This pattern is similar to a pattern on the silver chart.

Below, is a graphic which features the Gold/Platinum Ratio chart (top) as well as the silver chart (bottom):

 

gold platinum ratio similar to silver chart

 

The graphic is self-explanatory, and indicates that the Gold/Platinum Ratio is in a position similar to where silver was at the end of January 2011. If the ratio was to continue to follow the silver pattern, then we could have gold being 1.7 times the value of platinum in this year. This is consistent with my expectation of a significantly higher “real’ gold price (relative to stocks and most commodities).

Note, that it is more probable that an increase in the Gold/Platinum Ratio would mean higher nominal gold prices, instead of lower gold prices. This is due to the fact that the recent decline in the ratio corresponds more with the correction in the gold price, since September of last year.

So, the Gold/Platinum Ratio also supports significantly higher gold prices over the coming months.

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report , or subscribe to my premium service .

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved.”

Silver Premium Update (Silver Price Forecast) 19 March 2012

Silver Premium Update – Silver Price Forecast

By Hubert Moolman

19 March 2012

Silver has made its way out of the giant flag; however, it fell back again, lower than the upper boundary of the flag, as shown in the following chart:

Previously, I have stated that price will eventually break out of the flag and go on to make much higher highs. This is still my expectation, and here, I would like to present some more evidence for this view.

Where is silver going now?

Based on previous work on silver, gold, gold stocks and the Dow, I see a lot of similarities between now and the late 60s to early 70s (to 1973). Below, is an interesting comparison between the silver charts of then and now … : to continue, subscribe to my premium service

 

Silver relative to the Dow

It is important to understand the conditions that exist today in financial markets. I have explained these conditions in previous writings. We are currently facing conditions that are similar to that which existed during the Great Depression, but also during the 70s. Of particular importance, is the fact that we are at a point where the stock market is significantly overvalued as compared to real assets such as gold and silver.

Since 2001, there has been a correction in stock values, in real terms; however nominally, stocks are still significantly high (close to its all-time highs). I believe that this correction will continue; however, I expect the nominal values of stocks to decrease significantly over the next couple of years, while the nominal values of assets like gold and silver increase significantly.

In order for gold and silver to go into the mania phase… to continue, subscribe to my premium service

Hubert Moolman

For more of more long-term silver and gold analysis, see my Long-term Silver Fractal Report  & Long-term Gold Fractal Report.

Barron’s Gold Mining Index To Double Over The Next Couple Of Years?

Barron’s Gold Mining Index Forecast

The behaviour of gold stocks during this gold bull market is really not that different to the gold bull market of the 70s. It was not until almost the end of the bull market (in 1979) that the gold stocks really started to take-off. Those who think gold stocks will not rise during this bull market will be disappointed, and need to consider the evidence presented here.

Below, is a long term chart (from sharelynx.com) for the Barron’s Gold Mining Index (BGMI):

Barron's Gold Mining Index Analysis

On the chart, I have highlighted two fractals (or patterns), marked 1 to 6, which appear similar. What makes these two fractals so special is the similarity of the circumstances in which they exist.

Both patterns started where the Dow/Gold ratio peaked, as well as where the gold bull markets started.

There was a significant peak in the Dow (1973 and 2007) between point 1 and 2 of both fractals. Both peaks in the Dow came about 7 years after the peak in the Dow/Gold ratio. After point 2, on both fractals, the oil price made a significant peak (1974 and 2008), about 8 years after the peak in the Dow/Gold ratio.

Based on the fractals on the chart, we could still have more than two years before we could get a top in the BGMI, like we had at the end of 1980. That is more than 14 years after the Dow/Gold ratio top (beginning of 1966 to the end of1980 vs the end of 1999 to some time in 2014).

If you compare the two patterns, then it seems we are currently just past point 6, which is similar to the beginning of 1979. The correction since the beginning of 2011 is in the closing stages, and price should advance significantly over the next couple of years. If the patterns continue their similarity, then we should expect the BGMI to reach levels more than double its current peak.

In a previous article, I have illustrated why current levels could be a good time to buy gold stocks (HUI).

For more of this kind of analysis, see my Gold Stocks Fractal Analysis Report ,or subscribe to my premium service .

Warm regards,

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Long-term Silver Chart Analysis Indicates Why Silver Is Likely To Pass $150

Silver Forecast: Long-term Silver Chart Analysis Indicates Why Silver Is Likely To Pass $150

I would like to point out some interesting signals on the long-term chart for silver.

Below, is a long term chart for silver:

analysis long term silver chart

On the chart, I have highlighted two fractals (or patterns), marked 1 to 4, which appear similar. What makes these two fractals so special is the similarity of the circumstances in which they exist.

There was a significant peak in the Dow (1973 and 2007) between point 1 and 2 of both fractals. Both peaks in the Dow came about 7 years after the peak in the Dow/Gold ratio. After point 2, on both fractals, the oil price made a significant peak (1974 and 2008), about 8 years after the peak in the Dow/Gold ratio.

Thanks to this similarity in events, as well as the similarity in sequence, I was able to identify the great possibility for significantly higher silver prices, back in October of 2010. This was a very clear signal that higher silver prices were coming, and that is exactly what we got, when silver moved to $49. However, this run is not over yet. The move from $17, when silver broke out of the triangle (at point 3 of the second fractal) to $49 was just the first part of the move. In my opinion, the biggest and best part of this move is still ahead. In various previous articles on silver, I have presented a lot of evidence to support my opinion for higher silver prices over the coming years.

Based on the fractals on the chart, we could still have about two years before we could get a top like we had in 1980. That is 14 years after the Dow/Gold ratio top (beginning of 1966 to the beginning of1980 vs the end of 1999 to the end 2013).

From a price point of view, there is also an indication that this move is not over yet. If the two patterns indicated continue their similarity, it would be reasonable to expect the final top of the current pattern to higher than $150. Why? If you measure the price movement from point 1 to point 2, in the first pattern, and compare it to the price movement from point 4 to 5, in the first pattern, you will find that the movement from point 4 to 5 is at least 7.6 times larger.

Currently, the movement from 4 to the $49 in April of 2011 is only about 1.65 times larger than the movement from point 1 to 2. If it follows the first pattern, and grows at least 7.6 times greater, it will comfortably pass $150.

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report , or subscribe to my premium service .

Hubert

http://hubertmoolman.wordpress.com

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold Forecast 2012: Gold Market Update

Below, is an extract of my Gold Premium Update for 23 January 2012:

Gold is at a “sweet spot” at a moment; pullbacks should be aggressively bought. It just needs a trigger to launch it for the most spectacular rally since the late 70’s. I believe that trigger is likely to be the crash (or decline) of the stock markets.

This crash, if it occurs, is in anticipation of the inevitable bursting of the debt bubble. This is much like during the Great Depression when the stock markets crashed and bottomed before Total Debt as a % of GDP peaked in 1933. The Sovereign Debt-Crisis (especially in Europe) is the obvious sign that the debt bubble is bursting; with every additional unit of debt producing less or no increased GDP.

We do not have to only look that far, for an example of what is likely to come. Below, is a graphic that compares gold and the Dow, from June 2008 to May 2009.

The reason that I took these dates is because the period is similar (based on fractal analysis) to the current period. Gold bottomed in October 2008, more than four months before the Dow made a bottom.  From the time of gold’s bottom, gold and Dow moved together at first, where after gold continued its rally, while the Dow was falling. It was also during this period that the gold stocks started a rally. However, this time, conditions are even better for gold stocks (more in the Gold Stocks Update).

Gold Long-Term

Currently, it is macro factors that are driving gold; therefore, once it starts moving up, it will often not make sense when compared to what other assets like stocks are doing. This is what greed and fear do: they make people to act irrationally. Fear and greed will push gold and silver higher at a phenomenal rate, despite major economic decline.

We, therefore, have to keep a close eye on the long-term charts, since the evidence for a massive rise should be there (note that I have done extensive analysis of gold and silver’s long-term charts).

Update on the previous Gold Alert

The fractals identified in the previous alert appear to be playing out as predicted. Below, is an updated version of the chart from that alert:

The two patterns are indicated by points 1 to 10, to show how they are similar. Point 10 appears to be in now. The next important barrier is the downtrend line.  Note that a short-term reaction, before piercing the line is possible.

Furthermore, should price pierce the line and rally, I would expect some kind of retest of the breakout area. Please note that these are just short-term movements, and it is anybody’s guess what will really happen. We have to focus on the big move, which is a significantly higher price over the coming months.

Gold/Silver Ratio

Below is a chart of the gold/silver ratio:

I have drawn a support line that was violated recently. This is a good signal for silver and gold price. We could see a quick move to 45, however, we are likely to see a retest of that 54 area, before that.

This could also mean that we could have a risk-aversion episode when we retest the breakdown level, with gold and the Dollar rallying. A retest will be a good opportunity to load up on silver, since price is likely to pullback.

At some point – after retesting the breakdown area (if it does) – this ratio is likely to fall very fast. That might be the point when silver and gold really start to take-off.

For more of this kind of analysis, see my Gold Long-term Fractal Analysis Report and Long-term Silver Fractal Analysis Report , or subscribe to my premium service .

Hubert Moolman

 

Silver Price Forecast: Silver Market Update

Silver Price Forecast: Silver Market Update

Silver is currently trading at key resistance levels. See below, a six-year silver chart (all charts generated at fxstreet.com):

On the chart, I have drawn a significant upward sloping resistance line (red line). Silver has now reached that line, trying to breach it and stay above it. It has also reached the top resistance line of a big flag pattern. If the silver price gets through these resistance lines, and stays above them, then it is likely to continue its rise, but likely in a more accelerated manner.

These resistance areas can be very tricky. Price can often react in a violent manner downwards; however, there are no certainties.

What silver will do at these resistance areas is a short-term problem. From a longer point of view, it is clear to me that silver is going much higher. Eventually, it will successfully break out of the big flag and spike upwards past the $50 level.

In a previous article, I have shown how closely silver is following a past pattern on the gold chart. That comparison also suggests that the silver price will eventually successfully breach the resistance lines indicated above. Below, is the chart from that comparison:

On the charts (silver is the top one and gold is the bottom one, I have marked the two patterns (1 to 5) that are similar on the gold and silver chart. For more details and explanation of the two patterns, please read that full article. If the silver pattern continues to follow the gold pattern, then the silver price would pass the resistance lines indicated in the first chart, and eventually challenge the $50 level.

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report ,or subscribe to my premium service .

Hubert

http://hubertmoolman.wordpress.com

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold Stocks Forecast: Fractal Analysis Of The Barron’s Gold Mining Index

Gold Stocks Forecast: Fractal Analysis Of The Barron’s Gold Mining Index

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a Gold Mining Fractal Analysis Report.

Hubert

http://hubertmoolman.wordpress.com

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Analysis of the Long-term Silver Chart

Analysis Of The Long-Term Silver Chart Suggests Significantly Higher Prices

In a previous article, I wrote about the shift to measuring wealth in ounces instead of Dollars. In that same article, I expressed my opinion that I consider silver bullion to be one of the best current opportunities to increase one’s gold ounces.

Here, I would like to point out some interesting signals on the long-term chart for silver.

Below, is a long term chart for silver:

On the chart, I have highlighted two fractals (or patterns), marked 1 to 3, which appear similar. What makes these two fractals so special, is the similarity of the circumstances in which they exist.

There was a significant peak in the Dow (1973 and 2007) between point 1 and 2 of both fractals. Both peaks in the Dow came about 7 years after the peak in the Dow/Gold ratio. After point 2, on both fractals, the oil price made a significant peak (1974 and 2008), about 8 years after the peak in the Dow/Gold ratio.

Thanks to this similarity in events, as well as the similarity in sequence, I was able to identify the great possibility for significantly higher silver prices, back in October of 2010. This was a very clear signal that higher silver prices were coming, and that is exactly what we got, when silver moved to $49. However, this run is not over yet. The move from $17, when silver broke out of the triangle (at point 3 of the second fractal) to $49 was just the first part of the move. In my opinion the biggest and best part of this move is still ahead. In various previous articles on silver, I have presented a lot of evidence to support my opinion for higher silver prices over the coming years.

Based on the fractals on the chart, we could still have about two years before we could get a top like we had in 1980. That is 14 years after the Dow/Gold ratio top (beginning of 1966 to the beginning of1980 vs the end of 1999 to the end 2013).

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report ,or subscribe to my premium service .

Hubert

http://hubertmoolman.wordpress.com

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

VIDEO:

Silver Forecast: Silver Premium Update

Silver Forecast: Is Silver Outperforming The Gold Fractal?

Below, is an extract of my Silver Premium Update for 25 January 2012:

Since my last silver articles (here and here), the silver chart has been following the patterns, I have been tracking, quite nicely. Below is an updated version of the gold vs. silver fractal:

I have highlighted the patterns (marked 1 to 10) on gold and silver to illustrate how they are similar. It seems that silver is now just past point 12, and it has broken out at the blue downtrend line. If it follows the gold pattern exactly, it will move along in the channel formed by the two brown lines, just like gold did. If this happens, we could still wait a long time before the $50 level is challenged.

Below, is another comparison between gold and silver to put the above in perspective:

Here, I am comparing the same patterns, but I am just including a longer timeline before and after. I have marked the two patterns (of the previous chart) with points 1 to 5 (different numbering than before). I have also drawn a blue line where the top of the ascending triangle (as per previous article) was – just to give us perspective.

So, like I said before, if silver is to follow the gold pattern exactly, it would follow the red drawing, which would mean, it could take a very long time before we pass the $50 with some momentum. Based on the comparison of silver, to its 1970s pattern (as per prior article), we could follow the green drawing. This could mean we could pass $50 much sooner.

Currently, I expect it to form something more like the green drawing; however, we need to see some evidence of that over the coming weeks. This means that there should be acceleration in the silver price, as compared to the gold chart. The first thing that needs to happen (I think) is that price needs to break out (and stay out) of the channel (formed by the two brown lines) in the first chart.

This kind of thing did happen before, as you will see from an extract of my October 2010 Premium Update, below:

As per that update, if silver was going to follow gold exactly, it would have taken a long time before it broke out of that upward trending blue line. However, there was acceleration in the silver price, as compared with gold, and it ended up breaching the upward trending blue line, much faster than the gold pattern suggested.

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report ,or subscribe to my premium service .

Hubert

http://hubertmoolman.wordpress.com

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Forecast Video: The Shift To Measuring Wealth In Ounces Instead Of Dollars

Video (Silver Forecast): The Shift To Measuring Wealth In Ounces Instead Of Dollars

 

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver .

Warm regards and God bless,

Hubert

Silver Price Forecast And The Shift To Measuring Wealth In Gold Ounces Instead Of Dollars.

Silver Price Forecast:

The debt-based monetary system creates an illusion of wealth. It allows for claims on real goods to significantly exceed the actual amount of real goods. You then have a number of people believing they have wealth, since they have claims (pieces of paper or tokens) showing that they have these real assets, whereas, in reality, if everyone was to claim the real goods, there would not be enough to go around.

The high debt levels, in some way, represent the extent to which there are more claims than the actual underlying real assets.

During the period of credit extension – that has been for at least 80 years – most businesses are set up to take advantage of this system. The system allows for an easier way to increase wealth (illusionary), since only claims on real assets need to be increased, instead of the actual real assets.

As you come to the end of the credit extension cycle, most businesses are dependent on this credit extension, either directly or indirectly. When the debts become too heavy to bear (no one knows the day or the hour, but there are signs), the debt bubble will burst, and over time eliminate all those business opportunities brought about by the debt-based system, as well as the businesses dependent on it.

When this process reverses, there is little opportunity to trade the claim on an asset instead of the actual asset, and also few opportunities to increase the amount of real assets. Furthermore, instead of measuring wealth in terms of claims on real assets (as is now the case), people are more likely to measure wealth in terms of real assets, especially gold.

Today, after a consistent period of credit extension, we have exactly the situation where most businesses are dependent on the debt-based monetary system. I believe we are moving past the point, where any benefit can be achieved from credit extension; therefore, we have the ideal set up for a massive collapse in the world economy.

The increase in the gold price, in real terms, is the clearest signal that it is becoming more and more difficult to increase real wealth (wealth in gold ounces). It will become even more difficult as the economic decline sets in; eliminating businesses very dependent on the debt-based monetary system. Financial institutions like banks would be at the top of this list, but will not be the only ones.

The shift from measuring wealth in terms of paper claims (dollars) to gold ounces, and the limited means to increase gold ounces, will change the business and investment world significantly, and will create a massive rush into those opportunities that increase gold ounces. The shift is already evident, with some countries possibly trading oil for gold.

Currently, in my opinion, silver bullion and gold miners present some of the best opportunities to increase the amount of real wealth as measured in gold ounces.

Both, silver bullion and gold miners are still trading lower or at its 1980 high, and also at relatively historic lows against gold. Silver offers the best opportunity, at the moment, since it offers less risk than shares in gold miners. However, as the gold/silver ratio falls (which is expected), gold miners will become more and more attractive.

Silver Chart Update:

Below, is a 6 year silver chart:

Silver is making its intention to pass the $50 level clear. It is continuing in a pattern similar to gold did, before it cleared its 1980 high (see here). The next important obstacle is to get out of the flag (at about $35 currently). If it continues the pattern that gold made, then it will blast past $50.

For more guidance on silver and gold miners, I have prepared a Long-term Silver Fractal Report ,as well as a Gold Mining Fractal Analysis Report. You are also welcome to consider subscribing to my free newsletter (enter email on side-bar).

Warm regards and God bless,

Hubert

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold Stocks To Rally Like During The Great Depression And Early 70s

Below, is an extract of my Gold Mining Fractal Analysis Report.

“He answered and said unto them, When it is evening, ye say, It will be fair weather: for the sky is red. And in the morning, It will be foul weather to day: for the sky is red and lowering.”- Jesus Christ

During the Great Depression, at a certain point, gold stocks started a massive rally. While most things were going down in price, gold stocks made significant gains, becoming one of the best performing sectors during that time.

It was no coincidence that gold stocks performed as well as they did. Like all goods, gold stocks will thrive under the ideal conditions. During the Great Depression, those ideal conditions were present.

The purpose of this editorial is to look at what those conditions were, and identify a pattern that was present before and during those rallies. If we are able to identify those circumstances and pattern, we could look to see if they are present today, or in the future, in order to know when to expect a massive gold stocks rally. – end of extract.

I then go on to identify those ideal circumstances and patterns that were present before and during the great gold stocks rally. The conditions today are very similar to then, and is an ideal set-up for a most spectacular gold stocks rally over the coming months. Here, I would like to illustrate, by way of a chart, how the conditions were similar.

The gold stock rally of the 1930s coincided with major economic decline, as well as a significant increase in the real price of gold.  Below, is a chart (from planbeconomics.com) of the long-term Gold/Oil ratio:

On the chart I have highlighted a peculiar pattern that exists just before the gold stocks rallies of the Great Depression and the early 70s. The pattern is basically:

1. The peak in the stock market (DOW) and Dow/Gold ratio – point p
2. Gold rallies significantly from about after 1 – point g
3. After a significant bottom in the Gold/Oil ratio and after that ratio has been rising for quite some time.

Note that the yellow lines in the chart represent the point where the gold stocks really took off (broke out)

Currently, conditions are setting up in a similar manner to the Great Depression and the early 70s. We have a significant bottom in the long-term Gold/Oil ratio, we have had a peak of the Dow and the Dow/Gold ratio (in 1999) and we have had a gold rally that started after 1999, and is about to accelerate. We are also at a point where major economic decline can be expected (see my previous video), similar to the decline during the Great Depression.

So, it appears that we have conditions that are ideal for gold stocks to finally take the lead in this bull market.

Do the charts for these gold stocks agree?

Below, is a chart of the HUI (finance.yahoo.com):

HUI Analysis

The HUI appears to have bottomed, and is currently embarking on a massive rally. The yellow line should be good support, should price fall back again. Buying close to the yellow line would also be a good long-term entry point. Please note that the green drawn line is just for illustration purpose, it is not meant to show exactly how the chart will play-out.

Fractal Analysis of the HUI – only for Premium Subscribers.

A scenario for the HUI, which is very likely, is that the HUI follows the example of silver’s rally from the $19 level to $49. I think this is very likely, since it seems that the HUI is now in a very similar situation to where silver was in August 2010.

Note that there is more detailed analysis (including fractal analysis) in the Gold Mining Fractal Analysis Report.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver .

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast 2012:I Stand By $140 Silver Price In 2012

Silver Price Forecast 2012:

There is a well-established relationship between how silver and gold trade. They often trade similar in the same time period, but also at similar milestones, although those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone.

I have previously used this relationship to predict how silver will trade. Below, is an extract of that update:

Currently, there is another situation in the silver and gold market that provides an opportunity to predict how silver prices might trade over the coming months. I have pointed this out before, in a previous article. Here, I would just like to provide an update, and add a few more thoughts.

This situation or opportunity revolves around the 1980 all-time high for both metals. Gold passed its 1980 all-time high during 2008, while silver is yet to do so. By looking at the pattern of how gold passed its 1980 high, we can predict how silver might do it as well.

Below, is a comparison of silver and gold around their respective 1980 highs:

From the chart, you can see there is similarity in how gold and silver approached their 1980 high. Gold and silver made a triangle-type pattern (marked 1 -3) just before it reached the 1980 all-time high. When it came out of that triangle pattern, it rallied strongly to the 1980 high, which started the formation of a flag-type pattern (marked 3 – 9).

It appears that silver is now past point 9 (29 December 2011), and will now be eyeing that $50 level.

Market conditions often cause silver to fall behind gold, for quite some time, where after, silver normally catches-up in a big way. The fact that silver is still caught-up in a trading range lower than its 1980 high, at least four years longer than gold already, provides a classic opportunity for silver to follow that “catching-up pattern” and zoom to multiples of its 1980 high.

With gold having passed $1700 (twice the 1980 high of $850) already, given the above analysis, it stands to reason that $100 (twice the 1980 high of $50) silver is virtually guaranteed.

There are many indicators suggesting that we are close to a point where silver might catch –up with gold, relative to its 1980 high, in a big way. My recent analysis of the gold/silver ratio also seems to suggest this. So, as things stand, I expect silver to outperform gold for most of this year, and I stand by my target of at least $140 silver by the end of 2012.

For more unique analysis on silver and gold, you are welcome to subscribe to my free newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

Gold Chart Analysis: Gold Price At $6000 Before 2014?

Gold  Chart Analysis:

If the current gold bull market was to follow the timing and extent of the 70s bull market,the gold price would reach $6000 before 2014. See the image (below) or video for more information.

Subscribe to my free silver and gold newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver – for more details follow the links

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

Gold Big Picture – Gold Comparison Of Now Vs 70s Shows Big Rise In Price Yet To Come

Gold Big Picture – Gold Comparison Of Now Vs 70s Shows Big Rise In Price Yet To Come

The image can be found at my new site: picturegoldandsilver – analysis of gold and silver by using a single image/picture.

For more detailed gold and silver analysis subscribe to my premium service. I have also recently completed a detailed fractal analysis report for gold and silver. You can also subscribe to my free newsletter on the sidebar.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/ (gold and silver newsletter)

hubert@hgmandassociates.co.za

Silver Price Analysis: Silver’s 2011 Big Move – Was It The End Or The Beginning?

Silver Price Analysis: Silver Likely To Make Explosive Move

The price of a good often behaves in a similar manner at or around the same kind of milestone. An example of such a milestone could be a significant top. Price often forms a similar type of pattern at different significant tops – different in terms of time of occurrence. This is a reflection of how market participants themselves often behave in a similar manner when faced with the same kind of situation. This of course makes perfect sense, since it is normal, for example, to rest after you have been extremely busy for a while. For most people, this is true whether it was yesterday, or in 20 years.

In the current silver market, there are some similarities as compared with the 1970s. There are also things that are much different today, in the economic landscape, compared with that of the 1970s. One of the significant things that is different now is the fact that debt levels, relative to GDP, are extremely high compared with the seventies.

In my opinion, this is one of the main reasons why we are likely to have a massive Depression this time around.

Here, I would like to illustrate how the silver price behaves in a similar manner, today, compared with the 1970s. Below is a graphic that compares the silver price chart of January 1978—August 1979 to the period from January 2009—present (charts generated at barchart.com):

I chose these timeframes because price broke out of the significant high (for the relevant decade) around these periods. I have drawn a blue line at the level of the relevant significant high.

Note how the run-up to the blue line is visually similar in both cases. After going through the blue line, price rallied significantly until it peaked at point b (in both cases). It then corrected/consolidated forming a flag/pennant type formation.

Note that in the 70s and in the current chart, price corrected to just above the blue line. It does not mean it cannot still move to the blue line, since, to stay valid, it just needs to stay at or above the blue line. Note that, currently, I do not see any evidence that we will still go lower than the $26 level.

The comparison suggests that we should now rally towards point d and eventually go higher than point b ($50).

The flag pattern formed currently is significantly bigger (in price movement) relative to that of the 1970s. This is possibly indicating that this fractal pattern is growing significantly, which could mean, going forward, bigger price increases relative to the price increases of the 1970s.

The move from point a to point b, on the bottom chart, was remarkable. It took silver from about $17.50 to about $50, a 185% increase. Compare that to the 1970s move of 33.33% (from about $6 to $8). To me, this signals that silver has changed gears (big-time) relative to the 1970s.

The above comparison is also supported by a comparison I did for gold and silver, in a previous article.

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

Below is a graphic that compares the silver chart (from 2007 to today), to the gold chart (from 2008 to 2010) (all charts generated at fxstreet.com):

The top chart is for gold and the bottom is for silver. I have highlighted how similar patterns exist on both charts. On both charts are ascending triangles, out of which price broke out to the upside. After the breakout, price increased significantly from where both formed a consolidation pattern.

The ascending triangle for silver (roughly 30 months) is much bigger than that of gold (roughly 19 months). The consolidation patterns for both charts took roughly the same amount of time to form, relative to their ascending triangles (about half the time of the triangles).

Based on this comparison, it would seem that silver was at point 0 on 29 December 2011, and it is now busy making its way toward the blue line and will eventually pass the $50 level, just like the comparison to the 70s chart suggest.

Also, if you compare the price movement for silver after it broke out of the triangle to that of gold’s movement, you will notice that there is a huge difference. Gold moved from about $1000 to $1227 (a 22.7% increase), whereas silver moved from about $21 to about $50 (a 138% increase). This, to me, says that there is a massive amount of energy underlying the silver market, and when it is ready to unleash, we will see price/value increases that will stun even the most ardent silverbugs.

The kind of movement we’ve seen since silver has moved out of the triangle is normally associated with moves at the end of a big move. So, either that move was the end of silver’s big move, or it was just an unusually big beginning of a really big move, which suggests we will have an unusually big end of a big move (still to come). Again, I see no evidence to suggest that anything we’ve seen so far was the end of the silver bull market, so I am expecting the latter (i.e. a very powerful upleg yet to unfold).

The real power of this expected move is likely to be released only some time after price has surpassed the $50 level.

Below, is a video that illustrates the principle discussed here:

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver – more detail on my website.

Warm regards and God bless,

Hubert

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

hubert@hgmandassociates.co.za

Silver Analysis: Why Silver For A Monetary Collapse? Part 2

Silver Analysis: Silver Forecast

In part 1, I stated:

“We are at the edge of a major economic crisis. Our monetary system is the underlying cause of this major crisis. The massive debt bubble created by our monetary system is about to burst. The demonetization of gold and silver, has over the years diverted value from these metals, to all paper assets (such as bonds) linked to the debt-based monetary system.

The process of the devaluation of gold and silver, started by the demonetization of gold and silver, is about to reverse at a greater speed than ever before. This is similar to what happened during the late 70s, when the gold and silver price increased significantly. However, what happened in the 70’s was just a prelude to this coming rally. The 70’s was the end of a cycle, this is likely the end of a major cycle; an end of an era of the debt-based monetary system (dishonest money).”

What this debt-based monetary system has done, is to create what I call a “mirror-effect”, whereby, silver (and gold) is pushed down in value, to a similar extent as to which paper assets such as general stocks are pushed up in value. This mirror-effect clearly shows up on the long-term charts of gold, silver and the Dow.

Here (in part 2), I would like to show how this “mirror effect” of silver versus the assets linked to the debt-based monetary system (general stocks in this case), shows up on the long-term charts. This “mirror effect”, also reveals an interesting cycle, which provides more evidence to support my view, of the impending judgment of this system (monetary system), in terms of standards according to the Holy Scripture.

recommended: similarities between current crisis and great depression

Below, is a long–term silver chart (real and nominal) from 1850 to present (generated at minefund.com):

MineFund’s real precious metals prices are deflated by U.S. consumer price inflation (Consumer Price Index-All Urban Consumers, not seasonally adjusted, January 2011 = 100).

I have drawn a vertical red line, approximately where silver was demonetized (1870s). Notice how the real price of silver collapsed after the red line, from about $30, until it bottomed in 1931 at $4.29. It then traded side-ways (from the big-picture view) for many years, until it spiked from about the early 1970s, making a peak in 1980, where after, it bottomed again in 2001.

Technically, the bottom in 2001 was the completion of what would be a remarkable double bottom reversal, with the first bottom being in 1931. After a double bottom formation, there is often a big rally, and that is exactly what happened next. If this pattern continues to follow the pattern of a valid double bottom, it will reach levels that will exceed the 1980 high by at least one multiple, but probably by many more.

However, the purpose of this article is not to deal with targets. The interesting thing about this possible double bottom is the fact that the two bottoms came 70 years apart. This 70 years period also appears on the long-term Dow chart. Below is a Dow chart (from stockcharts.com) from 1900 to present:

On the chart, I have indicated a 70 year period from when the Dow peaked in 1929, to the peak in 1999. The reason for using the 1999 peak instead of the 2007 peak, is the fact that the 1999 peak represents the real peak, since the Dow/Gold peaked in 1999 (like it did in 1929).

Notice the dates of the peaks and how they fit in with that of the bottoms of the real silver price, as well as the similar 70 year periods between. In my opinion, the occurrence of the 70 year period on both charts, in the context as explained above, provides additional evidence of the link between silver’s demonetization (or suppression) and the massive debt bubble of this century – as explained in part 1 of this article.

While the Dow is inflated to the peak in 1929, silver is suppressed to its low in 1931. And again, the Dow is inflated to its peak in 1999, while silver is suppressed to its bottom in 2001.

So, the peaks and troughs, as presented in the above charts, are the manifestation (in visual form) of the debt-based monetary system causing paper and related assets to rise, while suppressing silver. Another way of looking at it is that the debt-based monetary system is fuelling speculation in paper assets by using energy diverted from precious metals. THIS IS THE REAL MANIPULATION OF GOLD AND SILVER – it is in the open.

Silver (like gold) stands in direct opposition to the current monetary system (they are inescapably linked). The fall (and falling) of this system is the rise of silver as money; therefore, massive increases in what silver can buy in real terms. 

Update on the silver pattern presented in my previous article

In my previous article on silver, I presented the following graphic that compares the silver chart from 2007 to today, to the gold chart from 2008 to 2010 (all charts generated at fxstreet.com):

It seems that silver has now made that low at point 12 (note, there is still a possibility of a retest). Price is now looking to break out of the down-trend since September (point 7). If silver continues to follow gold’s pattern above, we could see new all-time highs over the coming months.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver – more detail on my website.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold and Dow Forecast 2012 Video: Impetus for Mania Phase in Gold

Gold Price Forecast 2012 – Video

For more detailed analysis of gold, silver and the Dow, you are welcome to subscribe to my free newsletter (on sidebar) or premium service. Also consider my fractal analysis report on gold, silver and gold mining.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/ (gold & silver newsletter)

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved.”

2012, The Dow’s Annus Horribilis and Gold’s…

I must admit that I do not prescribe to the 2012 end of the world or end of an era phenomenon; however, my recent analysis suggests that 2012 could indeed be a very significant year.

I have been following a fractal (pattern) on the Dow chart for the last couple of years. I have written about it before, in a previous article. Basically, the Dow chart is forming a similar pattern to that which was formed in the late 60s to early 70s.

If this pattern continues in a similar manner to that of the late 60s to early 70s pattern, the Dow could indeed have an annus horribilis (horrible year). Below, is a long-term chart of the Dow:

I have highlighted two fractals on the chart. I have also indicated five points on both fractals to illustrate how they could be similar. Point 1 on both fractals was the exact point at which the Dow gold ratio made a significant peak. This is an important marker, and it gives credibility to the comparison of these two patterns.

It appears that the Dow is currently searching for that point 5. Point 5 could already be in, or it could be a little higher than the recent high (of 12 928). However, from a timing point of view, it is likely that we have reached point 5 already (a retest could still be possible).

If the current fractal continues its similarity to that of the late 60s to early 70s fractal, the Dow could have a horrible drop for most of 2012. I do not wish to speculate as to how low it will go; however, if it stays exactly true to the past fractal (fractals do not always stay exactly true), it could drop to 6000.

Since my other analysis suggests that we are at the end of era (an era of the corrupt debt-based monetary system), I would really expect the worst-case scenario. That means that a drop to 1000 is very possible (not necessarily in 2012), even though it appears highly unlikely.

The Dow’s inflated value, relative to the value of gold, was brought about by this debt-based monetary system. It follows naturally that in the event of the debt-based monetary system collapsing (it will eventually); the Dow gold ratio could go back to levels prior to the introduction of this system. This level could be anywhere between 0.2 and 1, in my opinion. Therefore, it is possible to have a gold price of $5000, with the Dow at 1000. I do not say that we will have these levels, but it is certainly possible. All I am saying is that we have to be prepared for extremes never before seen in our lifetime.

In addition, I have written before of how similar today’s conditions are to that of the Great Depression. Based on that analysis, today’s economic fundamentals certainly support the theory of a massive drop in the Dow, relative to gold and even the US dollar.

Now, if you think that gold cannot rise when the Dow has a massive drop as suggested above, then you should look at the following chart and think again:

I have compared the gold chart (top) from 1970 to 1975 to the Dow chart (bottom) for the same period. From the beginning of 1973, the Dow started a massive drop, while gold started a huge rally. Furthermore, the beginning of 1973 happens to be the same point as point 5 in the first chart.

From a short-term perspective, the Dow gold ratio is “overbought”, and could drop significant lower over the coming months. Below is a 3 year chart of the Dow gold ratio:

On the chart, I have drawn a possible blue support line, which now could be resistance. It appears that the ratio broke down from that support in July this year, and is now in the process of retesting that break-down point. The RSI seems to be at a three-year extreme, and suggests that upside potential from here, could be limited. If the ratio turns around now or closer to that blue line, it could fall very fast.

Gold appears to be at a very critical point of the bull market. See the chart below:

The gold price is currently holding just above the upward sloping line. Based on my long-term fractal analysis, this line is a critical area, and should price rebound form this line; it could rally like it did in late 1979.

For more detailed gold and silver analysis subscribe to my premium service. I have also recently completed a detailed fractal analysis report for gold and silver. You can also subscribe to my free newsletter on the sidebar.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/ (gold and silver newsletter)

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Where Is The Silver Price Going?

Silver Market Price Forecast

Silver and gold are in the process of bottoming, and should rally very soon. The depth of the recent decline may be surprising; however, it does not signal the end of the bull market. The fundamentals for silver and gold are very strong, and they have not changed over the last couple of days

We are still using fiat money and debt levels are still extremely high. The massive debts brought about by the debt-based monetary system, will not just go away. A few things have to happen before debt is brought to acceptable levels.

The debts have to be paid or defaulted on. Either way, that means significantly reduced economic activity (Depression) world-wide. That likely also means another big stock market crash. Before this happens it would be foolish to talk about a top in precious metals, since these conditions (a deflating debt bubble) are what will drive gold and silver prices significantly higher.

In a few of my previous articles, I have shown how one can use gold as a leading indicator, to predict what may happen to the silver price. I stated the following:

“So, there is not just a similarity in how gold and silver trade at the same time period, but also how they trade at similar milestones, despite the fact that those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone”.

I would like to continue with that theme, and use gold’s past patterns to suggest how the silver price will perform over the next couple of months.

Below is a graphic that compares the silver chart (from 2007 to today), to the gold chart (from 2008 to 2010) (all charts generated at fxstreet.com):

The top chart is for silver and the bottom is for gold. I have highlighted how similar patterns exist on both charts. On both charts are ascending triangles, marked 1 to 3, out of which the price broke out to the upside. After the break-out, price increased significantly, from where both formed a consolidation pattern.

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

The ascending triangle for silver (roughly 30 months) is much bigger than that of gold (roughly 19 months). The consolidation patterns for both charts took roughly the same amount of time to form, relative to their ascending tri-angles (about half of the time of the tri-angles).

So, from these two charts, it seems that silver is still following gold’s lead – but, are those consolidating patterns similar? It might not be clear that they are similar, but let’s take a closer look.

Below, I compare the two consolidating patterns, to see if there are any similarities:

Again, the top chart is for silver and the bottom for gold. I have highlighted significant points (1 to 12) on both charts to suggest how the patterns may be similar. The first significant similarity to point out, is the fact that the first part of both patterns formed a cup (points 1 to 5), which are similar to cups formed, right at the beginning of both their respective triangles. (See the previous chart – the cups start at point 1 and finishes halfway to point 2).

The fact that the first parts of both patterns are similar to cups within their respective triangles, lends more justification for comparing these patterns. One of the reasons why it might not be so apparent that these two patterns are similar, is the fact that the angle at which the patterns appear, are different overall, as well as for some individual patterns, within the pattern. For example, for gold the cup (1 to 5) slants upward, from left to right, whereas for silver it slants downwards.

Now, if you look at both chart in detail, and compare the points I have highlighted, you will see that they are quite similar. If these two patterns are indeed similar, then silver is searching for that point 12, which could already be in today, or could be in (lower) over the next couple of days.

If the similarity between the two patterns continues, then we could have a massive rally soon. This is therefore consistent with my previous analysis which calls for a much higher silver price over the next couple of months.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver.

Warm regards and God bless,

Hubert

(gold and silver newsletter)

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver And Gold Market Price Forecast: Buying Silver Is Like Buying Gold At $554 Today

Silver and Gold Market Price Forecast

I think that buying silver today is like buying gold for $554 an ounce. Let me explain: As I am writing, silver is currently trading at about 65.2% (32.6/50) of its 1980 high. If gold was trading at 65.2% of its 1980 high, it would be trading at $554 (0.652*850).

Now, I really like gold, even at today’s price of $1 738, but why should I pay $1 738, if I can get it for $554 by buying silver and then exchanging it for gold when the gold/silver ratio is at an extreme (in favour of silver). The reason for this logic comes from the fundamental relationship between gold and silver as explained in my previous article.

For my argument to be valid, silver has to outperform gold over my investment period, and at least equal gold’s performance relative to its 1980 high. That is, for example, if gold reaches five multiples of its 1980 high ($4250), then silver should do the same ($250), in this example, giving us a gold/silver ratio of 17.

Now, if silver outperforms gold, then that means that the gold/silver ratio should decline over my investment term. In my previous article called: Why Silver for a Monetary Collapse, I analysed the gold/silver ratio from a very long perspective (200 years). Here I would like to take a slightly more short-term view (40 years).

Below, is a long +/- 40 year chart of the gold/silver ratio:

On the chart, I have identified two fractals, which I have both marked with points 1 to 3. The two patterns are visually very similar. I have indicated two option of where we could be currently (on the current pattern), compared to the 70s pattern. The ratio appears to be at a major crossroads, ready to make a big move, up or down. This could mean that a massive move in the gold and silver price is due shortly.

Based on the patterns, if it moves up, it would likely signal the end of the precious metals bull market, similar to January 1980. A move down would be an acceleration of the current bull market in gold and silver, similar to August/September 1979.

The question is therefore: Do you think the bull market in precious metals is over? Before you answer that, first consider the following:

On the above graphic, the top chart is the current gold bull market from 1999 to date, compared to the bull market of the 60s and 70s, the bottom chart. The previous bull market in gold was about 14 years long, from a peak in the Dow/gold ratio to the bottom in Dow/gold ratio. The current bull market is 12 years, from the peak in the Dow/gold ratio to date.

The previous bull market ended with a parabolic move in gold (on the above scale). The current bull market has not made a parabolic move (on the above scale); in fact, it has been rising steadily over the last 12 years.

To me, these two charts suggest that we are more likely to have a parabolic rise in the gold price, than being at the end of this bull market. Therefore, it also suggests that price action for gold and silver, and the gold/silver ratio is likely to be more like 1978/1979 than like January 1980.

So, back to my argument of buying silver, in order to get gold at $554: I certainly think that silver will outperform gold over the remaining part of this bull market in precious metals, as well as, at least equal gold’s performance relative to its 1980 high. I can certainly see how gold could be at $4250 with silver being at $250, or at higher prices, with the gold/silver ratio being at 17 or less.

For more analysis on silver and gold, you are welcome to subscribe to my free or premium service.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast Video : Silver Is The ideal Asset For A Monetary Collapse part 2

Silver Price Forecast: Silver During A Monetary Collapse

Please subscribe to my premium or free service (subscribe on the side bar by entering email address) for regular updates. For more detailed silver analysis you can purchase my Silver Fractal Analysis Report.

Warm regards and God bless,

Hubert

Silver Price Forecast Video : Silver Is The ideal Asset For A Monetary Collapse

Silver Price Forecast: Silver During A Monetary Collapse

Please subscribe to my premium or free service (subscribe on the side bar by entering email address) for regular updates. For more detailed silver analysis you can purchase my Silver Fractal Analysis Report.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

Is A Gold Parabolic Blow-off Long Due?

Gold Forecast 2012

The last three major bull markets of the Dow were followed by a bull market in gold. This is no coincidence, since these massive bull markets have been mostly driven by the huge expansion of the money supply. When this expansion of credit is exhausted, the confidence in all things (like stocks) inflated by this expansion of credit fails, causing a massive rush to gold.

There are many similarities between the period around the current bull market in gold, the period around the 70s bull market in gold and that of the Great Depression. The main difference between the period of the 70s versus those of the Great Depression and the current period is the fact that debt levels relative to GDP were much lower in the 70s.

Total US Debt as a percentage of GDP was at about 299% at its peak in the 30s, and at about 369% in 2009, versus a level of just lower than 160% during the 70s. In my opinion, this is probably one of the main reasons why the crisis of the 70s did not lead to a full-scale depression like in the 30s.

Below, is a chart by which I illustrate the similarities between the current period and that of the Great Depression:

original charts by gold-eagle.com and from finance.yahoo.com

The top chart, of the above graphic, features the Dow from 1924 to 1935. During the 20’s the Dow rallied significantly, mainly because of the expansion of the money supply. The Dow finally topped in 1929, at the time when debt levels were at all-time highs, with the Dow gold ratio also peaking. At the same time, Total US Debt as a percentage of GDP started spiking significantly, until it peaked in 1933. At about the same time when the stock market peaked, the demand for gold started increasing, putting pressure on the US gold reserves and eventually forcing Government to increase the price of gold. The real price of gold had been increasing steadily since 1929, until it started to accelerate at about 1932.

The bottom chart, of the above graphic, features the Dow from 1987 to 2011. The pattern of events is similar to that of before and after the 1929 Dow peak. The Dow rallied significantly during the 80s and 90s, mainly driven by the expansion of the money supply. The Dow eventually topped in 1999, at the time when debt levels were at all-time highs, with the Dow gold ratio also peaking. At the same time, Total US Debt as a percentage of GDP also started spiking significantly. At about the same time when the stock market peaked, the demand for gold started increasing, pushing the price progressively higher.

The above should make it clear that there is a relationship between the expansion of the money supply, bull markets in stocks and bull markets in gold. It is my believe that the extent of the bull market in gold is mainly determined by the extent to which credit was expanded in the years prior to the gold bull market, and the extent to which it led to an increase in things like stock values.

Based on my research, I believe we are now at a period which is similar to the end of 1932, with the worst years of the Depression, like during 1933 and 1934, almost upon us. This period will likely be longer than that of the Great Depression, bringing significant economic decline and a lower standard of living.

Gold should significantly increase the speed of its rise since 1999/2001, starting this month, December 2011, just like it did in 1932/33 (increase in gold’s real price), after increasing steadily since 1929. Just like during 1933 and 1934, gold stocks are likely to be the best performing assets, over the coming years.

I have created the following charts to illustrate how the bull markets in gold could be related to that of stocks:

The above chart features the Dow from 1942 to 1966, and gold from 1966 to 1980. The starting and final points for both bull markets were chosen, since they represent the significant turnaround points, based on the Dow/gold ratio.

After a 24 year bull market in the Dow, and a 10.8 fold increase from top to bottom, gold started a bull market which lasted 14 years, with a 24.8 fold increase from top to bottom. Notice how different the bull market in gold developed compared to that of the Dow.

The Dow had a fairly steady rise throughout its entire bull market, whereas the gold price rose violently towards the end of the entire bull market, with a parabolic blow-off top. Also, notice that the gold price increased much faster than the Dow (14 years vs 24 years), as well as to a greater extent (24.8 years vs 10.8 years).

The above chart features the Dow from 1980 to 1999, and gold from 1999 to November 2011. The starting and final points for both bull markets were chosen, since they represent the significant turnaround points, based on the Dow/gold ratio.

The latest Dow bull market was 20 years long, increasing the Dow about 16.3 fold. Will gold have a more significant increase compared to its 24.8 fold increase, due to the fact that the Dow’s increase was more than its previous bull market increase? If gold only matches its 1970s bull market increase, it could go to $6 200 ($250*24.8). Will the gold bull market have a similar parabolic blow-off like it did at the end of the 70s?

Notice that the gold bull market is already 12 years old. The 1970s gold bull market was about 58.3% the duration of the Dow’s bull market before that. At 12 years, the current gold bull market is already 60% the duration of the last Dow bull market.

Could this mean that the gold bull market is over? Or, Could it mean that this gold bull market is not just related to the 1980 – 1999 Dow bull market, but the entire Dow bull market since silver and gold was demonetized? The end of a huge cycle. If this (the latter) is the case, then could it mean that the Gold bull market could still last for many more years, with gold going to extreme highs or even not being available for sale in Dollars? Or/and, could this further support the possibility that a parabolic blow-off is due almost immediately?

For possible answers to these questions and more, as well as analysis of gold, silver and gold stocks, you are welcome to subscribe to my premium or free service (subscribe on the side bar by entering email address), or more detailed analysis of gold consider my Gold Fractal Analysis Report.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”