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

South African Rand Lost Almost All Of Its Value Against The Krugerrand Since 1967

Rand lost all its value against the gold Krugerrand

Dow’s Bubble To Burst With The 60yr + Debt Bubble?

You may have noticed that I have just started my latest blog: picturegoldandsilver, which contains gold and silver analysis through use of images  – less reading -:).

You can see or follow it on twitter: https://twitter.com/picturegold as well as find this post:  Dow’s Bubble To Burst With The 60yr + Debt Bubble?

If you have a twitter account (or not), please feel free to follow picturegoldandsilver. I will be posting a lot of unique analysis there.

Warm regards,

Hubert

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

Something A Little Different

I just want to change the style a little today, and post something different. I hope you enjoy this.

These guys are awesome. I work with these guys from time to time. We have travelled together to many places, including: Europe, Hong Kong and Seychelles. These guys are all from my home town, Cape Town. They have played at major events world-wide.

Let me know what you think?

Regards,

Hubert

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.”

Gold Price Forecast 2012: The Impetus for the Mania Phase in Gold

Gold and Dow Forecast 2012:

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. See the following chart (from barchart.com):

gold 7 yr chart

Gold price forecast with support

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 printing of more money does benefit gold, but it does not necessarily benefit gold more than other assets—such as commodities, for example.

recommended: Why silver for a monetary collapse?

Historically gold has made its significant gains, relative to other assets (as well as nominally), not during inflation, but during deflation (Note: I am using the terms inflation and deflation very loosely in this case). These significant gold rallies historically occur when value flees instruments such as stocks and certain commodities.

Since the 1920s there have been three major gold rallies (1930s, 1970s and the current rally).  Below is a Dow Jones Industrial Average chart (from stockcharts.com) from 1900 to today.

112 year Dow chart indicating gold rallies

On the chart, I have indicated the periods where a gold rally occurred. During the 1930s there was one big rally (increase based on the real price of gold – data from minefund.com) from about 1931 to 1934. During the 1970s there were two rallies, and I have also indicated two rallies since 2001.

All three major gold rallies came after a significant top in the Dow and the Dow/Gold ratio (1929, 1966 and 1999). A great portion of the 1930s and 1970s rallies occurred when the Dow was falling significantly. In fact, the biggest rise in the gold price occurred when the Dow was falling or was trading closer to the bottom of its trading range during that period.

  • The 1932 bottom in the Dow came during the 1930s gold rally indicated. Also, the top in the price of gold came when the Dow was trading closer to the 41.22 low in the Dow than to the 381.17 high.
  • The 1974 bottom in the Dow came during the 1970s gold rally indicated. Also, the top in the first of the two gold rallies of the 1970s came at about the low in the Dow in 1974.

From the above it is clear that the Dow was weak and/or falling when gold had its best rallies. In other words, much value was diverted from the Dow and related instruments to gold during these periods. A weak and/or falling Dow (or what it represents) was an impetus for the massive increase in the gold price during these rallies.

The current gold rally (since 2001) has mostly been during the time when the Dow has also been rising, with the exception of a short period in both 2002 and the end of 2008 to Feb 2009. The best of the current gold rally, since 2001, has been during a time when the Dow was rising as well. Therefore, based on the evidence from the 1930s and 1970s gold rallies, I believe the current gold rally has not yet had its best period – it is still to come. My current fundamental and fractal analysis of the Dow and gold supports this view.

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

The Dow is currently trading close to its all-time high, and it is my opinion that gold will step into the next phase of this bull market when the Dow starts to fall. A falling Dow, with weak economic conditions, will be the impetus for the next massive rally in gold, just like it was in previous bull markets. A falling and/or weak Dow will in some way represent the diverting of value from stocks to gold. For more on the fundamentals of why a falling Dow will cause the next massive rise in gold, see my article called: Is a Gold Parabolic Blow-off Long Due?

My current analysis suggests that this is likely to happen soon, since gold appears to be bottoming (or has already bottomed), whereas the Dow appears to be looking for that final point (see this article for more details).

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

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.”

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”

Silver Price Forecast 2012 And Beyond: Silver Bull Market vs Dow Bull Market

Silver Price Forecast Video:  Comparing the Dow’s bull market of the 80s and 90s to the current silver bull market. Similarities predict that silver prices should rise significantly over the coming years:

 

For more silver analysis, purchase my Silver Fractal Analysis Report or subscribe to my Premium Service.

Silver Price Forecast: Why Silver For A Monetary Collapse? Part 1

Silver Price Forecast:

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).

This era of dishonest money, has filled the economic world with many promises that will never be fulfilled. There will be a massive flight out of paper promises, into the ideal safe haven assets that would offer protection.

The type of assets that people will flee to depends on the extent to which the assets offer protection against the specific crisis. For example, if people are extremely thirsty, then most would likely go for water, instead of milk or soft drinks. They would therefore rank water higher than soft drinks or milk. The reason that they would go for water is due to its superior properties, for countering the thirst crisis.

In a similar manner, people will run to the assets that have the ideal properties to counter risks and issues brought about by this economic crisis. Most people in the  hard-money camp will agree that gold is the asset that people will flee to in this economic crisis, but for some reason, there  are those (sometimes respected analysts) that believe that silver is not that safe-haven asset.

I believe that people will (and are) running to gold, not because gold was ordained by some divine providence or something, but: because it has those specific properties to offer protection against the crisis – properties given by God. It follows naturally that whatever assets have similar properties, will be similarly in big demand, as a safe- haven.

What are the properties of gold that offers so much protection against this crisis?

Simplified, it is important to understand that the true nature of this crisis is monetary; therefore, assets that possess monetary properties will be the premier assets. The issue here is not whether gold, silver or other assets are money or not. It is whether they have monetary properties, because that is what people will be after.

Good money should be effective as a store of value, a medium of exchange as well as a unit of account. In order for money to be effective in the above it has to have the following properties:

  • divisible – should be divisible in smaller units
  • portable – able to carry it around therefore a high value should be able to be contained in a small space and weight
  • homogenous – one unit should be the same as any another unit
  • durable – should not be able to be easily destroyed or eroded
  • valuable – should have intrinsic value, normally because it is desirable. Should not be able to be created or discovered without reasonable effort.  normally a commodity itself.

recommended: similarities between current crisis and great depression

Gold has all the above properties. It is almost a perfect fit. How about silver? Is it not also a perfect fit?  In fact, silver is a perfect fit as much as gold is; there is not much to choose between the two. Gold and silver are the two assets that best fit the above properties; therefore, both will be the assets in most demand. If someone tries to convince otherwise (that silver will not offer protection like gold), he has to show how silver does not fit the properties that will offer protection against this crisis (the above listed properties).

Personally, I prefer silver over gold. Mainly because: silver offers better value as a result of it being one of the most undervalued assets today, it is less likely to be confiscated (at least for a while), it is more accessible for now due to its lower price. However, I recommend both.

Chart Analysis

Below, I have put together two great long-term charts. The top one, is from minefund.com, and features the gold-silver ratio from 1791 to present. The bottom chart, is from sharelynx.com, and features the Dow-gold ratio from 1800 to present.

I have lined-up the two charts. I will only point out a few things here. The first thing is the double-top in the gold-silver ratio, and the recent failed attempt (at the 80 level) to test the highs. This makes a test of the all-time highs very unlikely and a test of 16 (the bottom between the two tops) very likely.

I have drawn a vertical blue line, approximately where silver was demonetized (1870s). Notice how the gold-silver ratio started rising, becoming very volatile with three massive peaks eventually forming.  The Dow/gold ratio also made three massive peaks after the blue line.

recommended: why a mega gold stocks rally is imminent

The Dow/gold ratio (when high) is in some way, a proxy for the extent to which value is diverted from real money to paper assets. The 80 years before the blue line, silver and gold was generally still money. The gold-silver ratio was reasonably stable and lower than 20, and the Dow-gold ratio was at lower levels.

After the blue line, the gold–silver ratio rises significantly, and becomes very volatile. The Dow-gold ratio also rises significantly, showing the extent to which value is being diverted from real money (silver) to paper assets. After, gold is demonetized (by the 30s), the Dow/gold ratio rises even more, making higher peaks, and showing the extent to which value is being diverted from both gold and silver, to paper assets.

This trend has been reversing since about 1999, and it is likely that the speed of the reversal will soon intensify. Notice how the Dow-gold ratio tested the 1 level in 1980. That level is incidentally the key- level at which it broke out of during the 1870s, which is exactly when silver was demonetized. At the same time, in 1980, the gold-silver ratio also made a significant low of about 16. Both ratios were attempting to go back to pre-1870s levels. Was it a co-incidence that both ratios tested the 1870 levels?

After the double-top, it is almost certain that the gold-silver ratio will go back to the 16 level, and even look to touch an extreme level, lower at possibly 7. Technically, based on the extreme highs of the two peaks of the double-top, a ratio of 1:1 is not impossible.

Based on the true fundamentals, it is reasonable to expect things to settle at pre-1870’s levels – eventually. That is, that gold and silver will be used as money, with the gold-silver ratio at between a possible 10 and 16.

For more detailed silver analysis and silver price forecast, I have prepared a Silver Fractal Analysis Report. For more details, see  here.

Subscribe to this blog or to my Youtube channel: FractalSigns for regular gold and silver commentary and updates.

You might also like the following:

why-gold-stocks-and-why-now

silver-vs-nasdaq-a-response-to-mr-erik-swarts

Warm regards and God bless,

Hubert

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

Dow Jones Forecast 2012

Below, is a recent video I posted on my youtube channel: fractal signs. I do some fractal analysis on the Dow Jones Industrial Index.

For regular video analysis of HUI, JSE Index, Dow, Gold and Silver, subscribe to my youtube channel.

Silver vs Nasdaq (Silver Price Forecast 2012): A response to Mr Erik Swarts

Silver Price Forecast 2012:

I recently read an article by Mr Erik Swarts, which I found very interesting. I enjoy reading his articles, since he often identifies fractals on financial charts, in order to forecast, what may or may not happen. This is exactly what I specialize in.

In this particular article, he compares silver with the NASDAQ, and states:

To further color what I perceived to be the unbridled risk appetite within the silver market, I contrasted silver with the parabolic rise and break of the Nasdaq market in 2000. Interestingly, both markets have traded very similar, both through the parabolic rise and breakdown, when contrasted with the relative strength of their closest cousins – the SPX for the NDX and GLD with SLV

Specifically in that article (and the related articles), he compares the April 2011 peak in silver, with that of the Nasdaq in 2000. The correlation between the two patterns has been quite accurate thus far. However, I am of the view that this correlation will not continue; it is about to diverge significantly. This is why:

On financial charts, a particular pattern can often repeat itself, on the same chart, as well as on the chart of another good. Often, two patterns correlate for some time, but then it can suddenly diverge. Whether two patterns will continue their correlation or diverge, depends on many things.

One of the important things that I look at is the context in which the two patterns exist. If the context in which they exist are similar, then it is very likely that the correlation between the two patterns will continue, and vice versa.

When considering the context, one also has to look at the relevant time frame. If the relevant conditions surrounding both patterns, exist in similar time frames, or span over similar time frames, it increases the likelihood of the two patterns continuing the correlation.

The top in the Nasdaq in 2000, came at a time when the stocks were significantly overvalued compared to real assets. In fact, it was at all-time highs. This is because the Dow/gold ratio peaked in 1999, at about 44, and was still close to 40 when the NASDAQ peaked.

I do not believe silver was overvalued on a historical basis (on a short-term basis it might have been). It was only at its 1980 all-time nominal high, and still below the inflation adjusted high. The gold/silver ratio might have been at a recent low (it was at 32), but that is not an all-time low. In fact, the long-term mean (200 years and more) is lower. So, in terms of gold, silver was not at an extreme level, it was in fact undervalued.

The top in the Nasdaq was an all-time high, with no other peak coming close to it. As said before, the peak in silver was only at the 1980 all-time nominal high. So, the structures of the two charts are very different from a long-term perspective; therefore, the two peaks are very different from a long- term perspective. The macro view takes precedence over the short-term view, and in this case, the macro view, suggests that the pattern of silver should diverge from the Nasdaq pattern.

To illustrate that the macro view suggests that the path for silver is likely up, and not down from here, I have prepared the following chart that compares silver to the Dow:

The top is silver, and the bottom is the Dow. In order to put the two charts in similar context, I have looked for certain markers, and matched the charts accordingly. In 1980, the Dow made a bottom, as measured in gold and silver. For silver, a similar bottom would be when the Dow/silver ratio peaked. For both charts, these points, respectively, were at significant lows for each.

Using the Dow/gold and Dow/silver ratio as a marker is important, since it gives us a proper context. It gives us what a Dow/dollar ratio is not able to give us, since it is an unreliable measure, due to the nature of fiat money.

I have marked the points that I perceive to be similar (1 to 4). It is interesting to note that point 1, on both charts, came about 7 years after the Dow/silver ratio bottomed/peaked. Based on this comparison, we are at a point just above point 4, on the silver chart, relative to the Dow chart. If the silver pattern continues to follow the Dow pattern, we could test the $50 level soon, and could make new all-time highs over the coming years.

Also, it does not mean that I do not expect the markets to be in for a rough ride over the coming months. In fact, I expect a significantly rough ride for the stock markets; it is just that I expect silver to move up, counter to the direction of the general markets.

For more silver analysis, visit my video channel. Also, you can subscribe to my premium service here.

Respectfully,

Hubert Moolman

http://hubertmoolman.wordpress.com/

Gold Stocks Forecast – Why Gold Stocks And Why Now – Must Read!

Gold Stocks look set to rise significantly over the coming months. The current economic conditions are ideal for a gold stocks rally. This video deals with the similarity between current economic conditions and that during the Great Depression, and why these conditions should fuel a gold miner rally. It also covers technical analysis of the HUI and JSE Gold Index. See my Gold Mining Special Report for more detailed and usable information. The video follows below:

How To Choose Gold Stocks During This Rally

The current economic conditions are, in substance, very similar to that of the Great Depression. I have recently highlighted some of these similarities in a video presentation . The pattern that is being followed, suggests that the next big event, will be an acceleration of the increase in the price of gold, as well as a significant rally in gold stocks, despite economic decline.

During the Great Depression, there was a significant decline in economic activity. This economic decline was a key driver of a higher real price of gold. That is, that the price of gold increased significantly compared to that of other commodities. This created favourable conditions for gold mines, and boosted their profits significantly.

The current debt-crisis should continue to put pressure on economic activity world-wide. Future production and consumption are being held ransom, by the huge debt obligations (whether debts get settled or defaulted on). During such conditions, the monetary demand for gold increases while the demand for commodities is badly affected.

Despite pressure on the demand for other commodities, their price should still increase (due to monetary inflation); it is just that the price of gold should increase faster. This is essentially why the real price of gold increases.

Gold appears ready to make the $2000 level its new home. Below, is a gold chart, which I featured in my 6 October gold update to my premium subscribers:

The drop in price, at the end of September, was just a re-test of the upward sloping resistance line. According to my fractal analysis, the crossing of this line starts a new phase in the gold bull market, where prices are expected to trade in a more bullish channel. This period is similar to that of August/September 1979 to January 1980. More detail of this comparison with the gold chart of the 1970s, can be found in my Gold Fractal Report. The current debt-crisis should continue to boost gold over the next couple of years.

In order to achieve maximum benefit from the expected rally in gold stocks, it is important to choose the right type of gold stocks.

Despite the likelihood that most gold stocks will rise during the next couple of months and more, some, for example, perform better when the going is good and vice versa. In my previous gold stocks article, I presented the following chart (from finance.yahoo.com):

It illustrates how the South African gold stocks underperformed the HUI significantly, since 2001. Those who would have invested in the South African gold stocks in 2001, would have missed out on the big gains made by the non-South African HUI stocks. This is another example of how some stocks perform better or worse, depending on the conditions.

My current research, however, favours South African (SA) gold stocks over other gold stocks, for this next rally. The current and coming conditions are an ideal set-up for these stocks. Again, it is important to ask which South African gold stocks. My analysis (fundamental and fractal analysis) of the economic conditions, as well as the expected levels of the ZAR gold price and energy cost, which affects SA gold mines, helps me to choose the ideal ZAR gold stocks for a particular time.

Currently, I favour the ones that do well when the going is good. Below, is a chart (from finance.yahoo.com) that compares the price of Anglogold (AU) with that of DRDGold (DROOY):

DRDGold, is a good example of a gold stock that performs well when the going is good for SA gold stocks in general. On the chart, I have highlighted (with yellow) the last period of ideal conditions for SA gold mines; during which, DRDgold significantly outperformed Anglogold. Since then (about May 2002), conditions have not been that great for the SA gold mines, therefore, Anglogold has mostly outperformed DRDgold. It appears we are currently entering a period where DRDgold is likely to outperform Anglogold.

The HUI is set to spike, and break out at the all-time high level soon. Below is a long-term chart (from finance.yahoo.com) of the HUI:

The 500 area has now been successfully tested, and HUI looks set to rally over the next 4 months (at least). We could see the 800 level reached as a minimum.

I have done detailed Fractal Analysis on the HUI, XAU and the GDX, in my Gold Mining Special Report. The report also highlights why the current conditions are ideal for a gold stocks rally. The report is $50. I believe the report offers great value, and trust that you will find it useful and interesting. I offer a money back guarantee, should you not be satisfied with the report.

Please visit my site for more information or to subscribe to my free or premium service. I have also recently started doing free video updates.

Warm regards and God bless,

Hubert

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

Similarities Between Current Crisis And Great Depression

My latest video update: Great Depression vs Now

 

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

Silver Price Forecast: Silver $140 At Least ?

I am trying out the Youtube medium for publishing updates on gold and silver. I have done the following video on silver. Please send to those who might be interested in silver, but, do not often read financial sites?

Silver Price  Forecast 2012:

Regards,

Hubert

Silver Price Forecast – Silver Is Ready, Are You?

Silver Price Forecast:

In my previous silver update, I presented the following chart, which indicated that silver was at a major crossroads:

I wrote the following: “The current pattern on the silver chart is in fact a highly bullish pattern. It is consistent with that which forms right before price goes parabolic. However, this type of pattern is also similar to that which forms just before we have a severe decline. That, I believe, is the reason why opinion is always divided before one sees a huge rise in price.”

Based on my Fractal analysis, I made the case for silver rising, therefore, choosing the “green path”. It appears that silver has now confirmed its intention to follow that green path. Below, is the updated chart:

On the chart, I have highlighted a possible flag, which could have a target in the $70 area, should it break out in the $40 dollar area.

I said before that the current pattern on the silver chart is an extremely bullish pattern. It is no ordinary flag. It is a pattern that often appears before a good goes parabolic. Provided that the silver price can breach the relevant resistance over the next couple of weeks, it will increase dramatically over the next couple of months.

This pattern on the silver chart has me convinced that silver will rise even faster than a lot of silver bulls are expecting. Let me give you an example of what is likely to come next, after this pattern. Below, is a comparison of the current pattern on the silver chart, and a similar pattern that was on the gold chart in 2007:

The gold chart is the top one. I have marked similar points (1 to 5), on both charts, to illustrate how the patterns are similar. Note, that the silver pattern is a much larger pattern (time-wise). I have also indicated where I think we are currently, on the silver chart, compared to the gold chart.

It is important to understand that these patterns cannot be randomly compared. One has to determine whether the context in which they exist, are similar. I deal with this in more detail, in my special Fractal Analysis reports. Also, most importantly, the fundamentals should also tell the same story, within context.

So, what happened next on the gold chart, and therefore, by extrapolation, what is likely to happen next on the silver chart? Below, is the gold chart, illustrating what happened after the formation of the pattern.

The gold price rose significantly over the following couple of months, making all-time highs.

If you measure the price distance between the low, and point 2, you will find that the gold price went three times that distance, higher than point 2. If silver emulates that, it should go to $140 (30*3 + 50) as a minimum. Due to the nature of silver, it is likely to better gold’s performance.

In any case, the point is not to calculate a target here, but to show you how potentially bullish the pattern on the silver chart is. If you would like to get more of this type of analysis for gold, silver and gold & silver mining stocks, you can subscribe to my premium service. I have also recently finished a Gold Mining Report that covers the XAU, HUI and the GDX as well as a long-term Gold Fractal Report. For more details see my website.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

Visit my Youtube Channel for my video updates on gold and silver

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 Forecast – Why A Mega Gold Stocks Rally Is Imminent – Must Read!

Gold Stocks Forecast:

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. Below is a chart (from sharelynx.com), which illustrates the performance of the gold stocks during this time:

It would seem that some stocks were going up as much as 300% and more, within a 1 to 2 year period. 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, perfect for a gold stocks rally, were present.

I have done some research, to establish what those ideal conditions are. Based on my findings, it is clear that massive gold stocks rallies follow a peculiar pattern of events and conditions. The pattern of events and conditions during the Great Depression is the prime example of this.

I have also found that the conditions today, are very similar to that of the Great Depression. Today, the pattern of events prior to the great gold stocks rally during the Great Depression, are playing-off in a similar manner. Based on my research, it is clear that a massive rally in gold stocks, like that of the Great Depression, is imminent.

During the 1920s there was a massive rally in the Dow, driven by the expansion of the money supply. This rally came to an end, when the Dow peaked in 1929 (also the Dow/gold ratio), followed by a severe crash. This set off a series of events and conditions, eventually leading to the massive rally in gold stocks.

The Dow peaked in 1999 (also the Dow/gold ratio) and in 2007, with a big crash from October 2007 to March 2009. This came after a huge rally in the Dow, since at least 1987. In a similar manner this has set off a series of events and conditions that will lead to a historic rally in gold stocks.

One of the peculiarities during the time of the Great Depression was the initial underperformance of South African gold mines during the first phase of the Depression. While the price of the US goldmine: Homestake, was increasing since 1929 already, the South African gold mines were still caught in a downward trend, from about 1927 until 1932 (see chart above). When the South African gold mines finally did start rallying in 1932, they outperformed.

Today, we have a similar situation as illustrated by the following chart (from finance.yahoo.com):

The chart compares the HUI to three South African gold mines: Harmony (HMY), DRD (or DROOY) and Gold Fields (GFI). You can see that South African gold mines have significantly underperformed since 2000, just like they did during the period of 1929 to about 1932.

This underperformance, I belief, was mainly due to the down trend in the US dollar/SA Rand exchange rate. It appears that this condition is about to change, with the South African gold mines outperforming most other gold mines, just like they did from 1932 during the Great Depression.

Below is a long-term chart of the JSE Gold Index (in ZAR):

I have done some fractal analysis on the chart, by indicating two patterns that appear similar. I have indicated 5 points on both patterns to illustrate how they are similar. If the bigger (current) pattern continues in a similar manner like the smaller pattern, then we are in for huge rally. This is consistent with analysis I have done for the ZAR gold price, US dollar gold price, HUI, XAU and GDX.

I have prepared a report: Gold Mining Special Report, which highlights the ideal conditions for gold stocks to rally. The report also covers Fractal Analysis of the HUI, XAU and GDX with usable targets for these indices. This is an extremely useful report that should help the reader to benefit from the coming gold stocks rally. The report is $50 ($30 for subscribers of my premium service), and I believe it will prove to be worth every dollar.

For a good preview of the report, see this video.

 

Warm regards and God bless,

Hubert

hubert@hgmandassociates.co.za

http://hubertmoolman.wordpress.com/

Visit my Youtube Channel for my video updates on gold and silver

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

Silver Update

Today, I am making my premium silver update available to all my subscribers. I trust that you will find it useful, and will consider to subscribe to my premium service. It is only $10 per update, and no long-term commitment.

The update follows:

Silver Update

by Hubert Moolman

14 October 2011

In a previous update on silver, I illustrated the high correlation between how gold and silver trades. Importantly, how they trade similar, at similar milestones, despite the fact that those milestones might be reached at different times.

The similar milestone that is relevant for silver’s current and immediate future is of course the 1980 high. Gold made a triangle-type pattern 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. From the flag pattern, price shot upward to the $1000 level (pass the 1980 high).

Silver is still following the pattern of gold, around its 1980 high, with the exception that, its down-side action is “deeper” than that of gold. The depth (its fall to $26) of the pattern that started forming since it reached the 1980 high again, is deeper ($30 was the deepest that I expected) than what I had anticipated, based on gold’s pattern. However, this appears to have been just a flash crash (provided we do not go there again).

Below is the silver chart:

On the chart I have highlighted the 1980 all-time high. You will see the big triangle type pattern just like one that formed on the gold chart (refer to the 15 June silver update). Out of the triangle it rallied strongly to the 1980 high (just like gold did). After reaching the 1980 high, it fell back, and appears to be forming the flag-type of pattern just like gold did.

The current pattern on the silver chart is in fact a highly bullish pattern. It is consistent with that which forms right before price goes parabolic. However, this type of pattern is also similar to that which forms just before we have a severe decline. That, I believe, is the reason why opinion is always divided before one sees a huge rise in price. This is illustrated below, on the silver chart:

The chart is self-explanatory. As you can see, we are at a major crossroads. We will either have a massive rise in price, or a major fall. In order to be able to make the right decision, we have to look at two important things.

  1. Context – Are the context in which the two patterns exist similar? Let us see. This is a very difficult one, far difficult than the similar one I was faced with when gold was in a similar position in July 2010. The top that was formed at point 1 in 2008 was a major top. Silver had been rallying for more than 5 years until then. Is the top at point 1 in 2011 a major top? I cannot say for sure. It could be, however, it came about 8 months after a huge (almost 30 month) deep consolidation. The first top came about 6.5 months after an almost 15 month consolidation. Given that the length of rallies are often relative to the size of the consolidation, one would expect a major top to only arrive much later than the top in 2011. At least another 5 months later, based on the pattern of the 2008 top. The 2008 top came at a time when there was a big aversion to risk. The current conditions are similar. However, there is case to be made for the fact that precious metals could now move contrary to the general market (as gold has mostly done since July 2011) during this risk-aversion episode, because it is the monetary system that is now at question. This could especially be true due to the crisis now being more about sovereign debt compared to 2008. I will stop here regarding context, but just conclude and say that I am biased towards believing (because of this and all previous analysis) that the context of this 2011 top is different to that of 2008, and suggests that the pattern will follow the green path instead of the red. We still have to look at confirmation standards before making a final decision.
  1. Confirmation standards – Based on the look of the two patterns it appears that the $33.55 and the recent low of $26 dollar are the two key levels. A break above the $33.55 level might suggest that the pattern is following the upward parabolic path, whereas a fall below the $26 level suggests we will follow the red path and have a dreadful fall. If we break above the $33.55 level, which I believe we will, we still have to break out of the flag indicated in the first chart. It also eventually has to go through the yellow line indicated on the first chart.

Conclusion

We are at a crossroads, and have to be watchful. Despite the fact that all my analysis suggests that silver should go higher, much higher, we still have to be watchful and pay close attention to the confirmation standards. Key resistance levels could be $40, the yellow line in the first chart and then $55 dollars. Interim targets could be $70 and then $90.

I have prepared a report: Gold Mining Special Report, which highlights the ideal conditions for gold stocks to rally. The report also covers Fractal Analysis of the HUI, XAU and GDX with usable targets for these indices. This is an extremely useful report that should help the reader to benefit from the coming gold stocks rally. For more information on the report see this article. The report is $50 ($30 for subscribers of my premium service), and I believe it will prove to be worth every dollar.

Warm regards and God Bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

P.S. Feel free to forward

Silver At A Major Crossroads

For the commentary on this chart, as well as to find out which way the silver price is likely to go, subscribe to my premium service.

Warm regards

Hubert

Gold Signals The End…By Hubert Moolman

Gold remains our best means of economic measurement. It is not a perfect or 100% consistent measure of wealth, but it is our best. Due to its monetary properties, gold can be used to measure wealth across generations. Just like we have the sun and moon to discern the times and seasons, I believe, we have gold to discern changes in wealth. It is interesting that the sun is often compared to gold, and the moon to silver. Just like a day in the Middle Ages is comparable to a day in this century, an ounce of gold in the Middle Ages is comparable to one today.

Currently we use fiat currency, like the dollar, for economic measurement. However, this creates a huge distortion due to the fiat currency being highly unstable. Can you imagine what would be the effect on our planet if we did not use the normal cycles that the sun and moon provides us with? Our ability to produce food for example, could be severely disrupted, leading to famine or possible extinction of mankind.

By using a highly unreliable measure like the US dollar, our ability to make proper economic decisions is severely impaired, since we (the common man) are not easily able to distinguish between a real increase or decrease in wealth , for example. This causes a great misallocation of wealth and will lead to a severe economic depression.

When you look at a chart of the average day’s wages in dollars compared to the average day’s wages in gold ounces, with some analysis, you will understand why the dollar cannot be used as an economic measure. These charts show that the average daily wage for Americans, have gone from about $20 in 1964 to about $152 in 2010, whereas in gold it has fallen from just short of 60% of an ounce  of gold in 1964 to just 12,67% of an ounce of gold in 2010.

Gold is telling us that people are now earning less money than they did in 1964, whereas the dollar is telling us the opposite. Which measure is telling the truth?  This bizarre situation is evident in our “economic” and “accounting” language, when we talk about a real and nominal increase in prices. An example would be when an economist tells you that house prices have increased in nominal terms, but decreased in real terms. What? How can something go up and down at the very same time? Using a proper measure, there would be no need to have a “nominal” as well as a “real” analysis.

These bizarre and illogical concepts in our economic language are as a result of the bizarre measure of value called fiat money. We have to look at the right signs to discern the times. I prefer to look at the “behaviour” of gold to discern the economic times.

What is gold’s “behaviour” telling me?

Gold Rallies and Debt

Since 1900, we have had three major rallies in the gold price. The first started during the Great Depression, the second since about 1968, and the current since about 2001. Note, the gold price went up during the Great Depression, since most things as measured in currency (gold) depreciated. Further to that, in 1933, due to increased demand, the gold price was increased from $20.67 to $35. During the first two rallies, there were major economic declines. The economic decline during the Great Depression was much worse than that of the 70s. This is mostly due to the difference in debt levels during the two periods. The debt level during the Great Depression was far greater than that of the 70s. The greater number of defaults, due to the bigger debt, took a bigger chunk of value out of the economy.

The current gold rally is still in progress. Debt levels now are greater than during both the previous major gold rallies. It is believed that in 2008, total debt as a percentage of GDP in the US stood at more than 340% compared to 265% during the Great Depression. At some point during the Great Depression, debt levels collapsed, causing a major economic decline. The rally in gold is a way reflection of how debt levels collapse. The current major rally in gold is thus telling me that we are likely to have an economic decline far greater than that of the Great Depression, in the US and most parts of the world. This economic decline has already started, and is about to intensify.

New Monetary Order

In 1933, Franklin D. Roosevelt changed the monetary order in the US, with Executive Order 6102. Fundamentally the dollar changed its nature due to this order, and was therefore no longer backed by gold – for US citizens.  As mentioned earlier, this and the revaluation of gold was done, due to the increased demand for gold. The principle is: people became aware that there were far more claims on gold (read dollars) issued than the gold available, and therefore demanded their gold. This was mainly the result of the increase in credit during the 20s. As explained above, this run to real money (gold) is basically the flip side of the contraction of credit or debt.

So, the revaluation of gold was done to halt or slow the debt contraction, with those who handed their gold to the government, paying the bill for this decrease in debt contraction. Also, it prevented the banking system from leaking more gold, due this increased demand for gold. The system was recharged, and ready to go, as we know, for another 38 years.

The late 60s to early 70’s (start of the second gold rally) brought the same problem, however, this time it was sovereign nations that became aware that there were far more claims on gold (or dollars) circulating than the gold that the US had available. Some nations requested their gold because of this fact, and the US banking system was once again leaking gold like it did during the Great Depression.

Like in the 30s, the US knew that it would not be able to deliver the demand for gold, due to this “gold run”, and it therefore decided to close the “gold window”. Just like the US citizens, nations could no longer exchange their dollars for gold. This stopped more gold from leaking out of the US reserves, and the system was yet again recharged. The bankruptcy of the US was now well hidden, and it seemed like the perfect con. No more demand for gold from neither citizens nor sovereign nations that might expose the bankruptcy (too many dollars), too few ounces of gold.

Dollar could now be printed without any accountability to those users of dollars (basically the whole world). They have done it: the perfect con.  Or have they?

No, there might be no one that will be able to bring the bankruptcy to light, due to the seemingly faultless plan; however, it is the natural laws that will bring this con to an end.

How? Debt levels are once again at historically high levels. The level of debt that this system can carry is limited. The level that it is limited to might not be known, however, one can look at natural laws in order to estimate a possible limit. It is my believe that the natural cycle (limits) for these type of systems (man-made systems) are linked to the human cycles of 40 years , 70 years and 80 years, as per the Holy Scripture.

The period of 40 years is associated with middle age, judgment, as well as a generation. The period of 70 years is associated with a life-time and judgment. The period of 80 years is associated with an extended life-time, two 40 year periods and also judgment.

The history of this dollar monetary system appears to follow these natural cycles with an almost scary accuracy. From the period of the Great Depression (gold revaluation) to Nixon closing the gold window is more or less 40 years. That is the period of 1929 to 1933 to 1971.

The period from 1929 peak in the Dow – when the stock market crashed, as well as the peak in the Dow/Gold ratio – to 1999 when the stock market made a peak (1st of 2 peaks), and the Dow/Gold ratio peaked, is 70 years. Remember, the Dow/Gold ratio is a significant indicator of the extent to which claims on real assets exceed the actual real assets; therefore, it is an extremely important signal when determining turning points in the current fiat money system.

The year 2014 will be 70 years since the Bretton Woods agreement that brought about the current monetary system, with the dollar as reserve currency. This is how the relationship with the US and the gold of other nation states in the US came about.

We are already in the period that marks 80 years since the Great Depression. The year 2013 will mark 80 years since the 1933 gold revaluation. It is currently 40 years since the closing of the gold window.

The point here is that the natural cycles appears to be very relevant to this man-made monetary system, and that it is very likely that we are extremely close to the end.

The end of the monetary system is likely to come before a peak in gold, if by decree (creation of a new monetary system), but still forced by natural law. If the system is ended by natural law, then it is likely to come at the peak in gold or after. The peak in gold I refer to is gold as measured against other real assets (not paper money).

Another possibility to keep in mind is the fact that gold could also be outlawed by most governments. I am not saying that this will happen, however it is a possibility, and should be watched for. If this comes to being, I believe we have entered the period when this might happen.

Again, the nature of gold allows us to keep track of the times and seasons of this corrupt system, by studying the behaviour of gold.

Gold Fractal Analysis

Based on the above analysis and long-term fractal analysis, it appears that we are close to a top in gold (in terms of fiat currency and real assets). However, let this not confuse you to think that we are close to a top in the price of gold in terms of the dollar or other currency amount.

We are close in terms of time (as early as the end of 2012 to the beginning of 2013), but $ 1920 is not close to $10 000, should $10 000 be the peak in the gold price, for example. It is also likely that gold will not have a peak in fiat currency as such, but instead, just discontinue trading in fiat currency. That means we might come to a point where gold will only be exchanged for real assets.

Below is a 38yr gold chart (thanks to goldprice.org):

I have done some fractal analysis on this chart. I published this analysis the first time when gold was well under $ 1200 dollars. The fractals indicated have astonishingly continued to keep its similarity as we have progressed during this gold bull market.

On the chart I have indicated two patterns marked by the numbers 1 to 3. The first pattern (fractal) forms a small cup between 1974 and 1978, compared to the second pattern which forms a big cup between 1980 and 2008. If the bigger pattern continues it similarity to the smaller pattern, then the parabolic (based on a long-term scale) move in gold should continue, taking gold to multiples of the current price. I have indicated the point in the 70s that is similar to point where we are at now.

What I wanted to highlight here is the fact that according to my fractal analysis, it appears that gold has reached a critical point where it is expected to rise really fast. Also, this analysis suggests that we could peak as early as the end of 2012 to 2013, and we should as a minimum reach $ 4000 by then. This is consistent with the above analysis regarding gold and the monetary system.

Please note, the above fractal analysis is just a very big picture analysis, as well as a simplistic analysis prepared for this article. One has to also look at the context in which both patterns exist as well as look at confirmation standards.

My premium subscription service and long-term fractal analysis report provides more usable information regarding the price of gold and silver. Please contact me for details as well as a free current edition of my premium service.

Other Important Points

I believe there are enough signs that indicate that we have entered a period where we should expect the worst. We should thus prepare for the worst, with the hope that we would be able to cope with whatever comes our way.

Due to the great probability that the fiat money system might come to an end soon, it is not desirable to exchange physical gold and silver for fiat money. Where possible it is better to exchange them for real goods and services and productive assets.

An economic depression is virtually assured due to the bankrupt monetary system as well as the extreme debt levels.

For more analysis, subscribe to my blog or premium service.

I have prepared a report: Gold Mining Special Report, which highlights the ideal conditions for gold stocks to rally. The report also covers Fractal Analysis of the HUI, XAU and GDX with usable targets for these indices. This is an extremely useful report that should help the reader to benefit from the coming gold stocks rally. For more information on the report see this article.  The report is $50 ($30 for subscribers of my premium service), and I believe it will prove to be worth every dollar.

Warm regards

Hubert

hubert@hgmandassociates.co.za

http://hubertmoolman.wordpress.com/

Visit my Youtube Channel for my video updates on gold and silver

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

Silver and Gold, Different Steps But Same Dance

It is well established that there is a high correlation between how the price of gold and silver trades. Thanks to this relationship between gold and silver, one is able to use historical trading data of the one good, in order to project what may happen to the price of the other.

Awhile back, I wrote about this in my newsletter:

Do not listen to those who call silver a bubble! It is very likely that, believing them, you will miss out on the greatest silver rally in recent times. Now, I cannot tell you for sure that silver or gold is going to rally from here – nobody can. What I do tell you is that all the signs that I look at are indicating that silver and gold will rally significantly from around this area.

Silver compared to gold

Let’s compare silver’s attack of its 1980 all-time high to that of gold. I believe this to be a justified comparison due to the fact that silver and gold’s prices have such a high correlation; but despite that they have a high correlation, they sometimes reach similar milestones at different times. Let me explain by way of the following chart:

Chart generated at commoditycharts.com

The green is silver and the black is gold. I have marked a similar peak for silver and gold as 1 and another as 2. Notice how at one time gold and silver pass their similar peaks at the same time, and at another time they pass it separately. But even on the occasion that they passed their peaks at different times, the manner in which the peaks were passed were still very similar.

I have also indicated where gold bottomed but silver did not. Silver instead bottomed at about 1993. Again, despite the fact that silver and gold bottomed at different times, their manner or pattern of bottoming was still very similar.

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. In this case (milestone of reaching the 1980 peak), gold is undoubtedly the leading indicator, so it could help us to project what silver might do around this milestone.

I have previously made my view clear regarding where I think silver is in this bull market. I have noted that silver has formed a cup — in a similar manner as gold did — when it reached the $50 mark. I consider the pullback to the $32 area (about 1/3 retracement of depth of cup) as normal; therefore, I consider the probability of silver going lower than the $32 level as highly unlikely.

Let us see if gold’s behaviour, when reaching its (relative) 1980 high in 2007, can help us to predict what silver will do going forward.

In the chart above, you can see that gold made a triangle-type pattern 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. From the flag pattern, price shot upward to the $1000 level. It is also worthy to note that point 4 of that flag pattern represents about the halfway point from point 3 to the eventual top ($1000).

Above, you can see that silver also made a big triangle-type pattern before it reached the 1980 peak. When it came out of the triangle, it rallied very strongly to the 1980 peak. At the peak it fell down to the $32 area. Is it currently forming a flag or similar pattern, just like gold did? I certainly believe so. I believe if price goes through the $42 level, it will confirm that silver is going to go back to $50 and soon blast through it, just like gold did through its 1980 peak. A fall below point 5, and all bets are off. However, I believe this possibility to be unlikely.

If we assume that silver does go through the $50 level, what target can we expect? If we use gold’s performance to establish a target for silver, it would appear that $80 would be a minimum. I think it will be much more.”

Currently, silver appears to be at the end of a flag-type pattern, just like gold’s at the end of 2007 (see above); so, it appears the correlation as explained above is still on track. Silver is about to take the lead in this precious metals bull market.

For  more detailed analysis on silver, see my Silver Fractal Analysis Report.

Warm regards and God Bless,

Hubert

Visit my Youtube Channel for my video updates on gold and silver

Turning Point By Hubert Moolman

I received an email from a good friend of mine, today. His comment, per the email, is in response to a prediction by Gann Global Financial, that 12 May 2011, was the 60-year anniversary of the commodity top, and that we might be at a turning point of what will be a 1 ½ year decline in overall commodities.

Below, is his email comment:

Hubert,

I don’t see how a failing dollar can allow for this prediction,

but it sure as hell seems like the markets are expecting it.

Initials.

I think his comment aptly summarises the peculiarity of the situation we find ourselves in, in today’s markets.

My reply (with additional comments added for this publication) is below:

Very, interesting. I agree we are at a big long-term turning point. I also agree that commodities have put in a long term high, but a high measured in what? Measured in dollar fiat or gold real money. My view is that commodities will decline significantly as measured in gold. Silver is more difficult, since it is part money and part classic commodity. However, the time we are going in now, should make its commodity role insignificant, and it will behave just like money, and follow gold. So, I would say that silver might have peaked in pure commodity terms, but as a currency it will peak when gold does.

So, commodities might have peaked (in real terms), but that means real money, is only just beginning its parabolic move. Fundamentally, gold and silver are real money and not pure commodities. We are in a time, where things will be exposed for what they really are. Fiat money and its related debt instruments will be exposed as worthless pieces of paper, whereas gold and silver will be exposed as the best value preservers.

Paper assets and other debt driven assets including stocks, have also peaked, as far back as 1999, and might soon start its panic drop, taking it to its lows. I think the K-wave analysts are right , when saying that we are in the Winter part of the K-wave. I believe this decline will last until at least 2020. I think so, due to a fractal calculation I did for gold.

The problem with establishing targets for the lows in commodities and stocks, is the fact that we are dealing with fiat money, which is an inconsistent measure. The 1965 dollar is, for example, is a completely different dollar to the current one. So the Dow, for example, should technically drop to $1000, but one is inclined to think that it might be impossible in terms of the current worthless dollar. I expect a huge drop in the Dow over the next couple of years, but whether it will be to $6000 or to $1000 remains to be seen. I believe both are possibilities. Remember, I think, the Dollar is closer to a long-term bottom, than a top, when measured against other currencies. Below is a chart (compliments of Yahoo Finance) I did for the Dow. I have indicated how two patterns (fractals) could be similar. The Dow might be searching for that point 5, before it could make a huge decline over the next 18 months or so. That point 5 might still be at 13100 or even at the all time high or higher, but we just have to wait and see. I have also indicated another possibility for the Dow, which suggest we might have a smaller correction (to about 9 -10 K), before we get to point 5 and the big correction.

Gold

In my opinion, gold and silver is looking extremely bullish at this point. Below is a gold chart which indicates a glimpse of my fractal work:


Gold should soon attack the upper boundary of the channel indicated. That means it should pass      $1600 very soon.  Based on the fractal work, it should eventually (after much volatility) go through the upper channel, and then really take-off from there.

Silver has just recently signaled and confirmed its intention to go to $100 and beyond over the next couple of years. By just about reaching the $50 dollar area, it completed a giant cup in similar manner to gold, when it touched its 1980 high. It is very normal to have a retraction after the cup is formed. It is normal for these retractions to retract about a third of the cup’s depth. For silver this can be anywhere close to that $30 to $34 dollar area, which means that should the cup be valid, the bottom for silver could be in. If not, it should not be much lower.

Warm regards and God bless–

Hubert

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

Please visit my blog and website for more of my work, as well as my free and premium service.

http://hgmandassociates.com/

You can email any comments to hubert@hgmandassociates.co.za

Gold Update

Below is my 16 March 2011 gold update, to give you an idea of my premium subscriber service. My gold updates are $10 per update.

If you are interested or would like to know more, you can contact me via email. I have just issued an update on gold and silver, today.

Warm regards

Hubert

hubert@hgmandassociates.co.za

Gold Update

16 March 2011

I trust that you are all well?

This is just a quick update on the gold market. The gold price has risen nicely since my last update.  Price movement has been consistent with the fractal predictions as per the 27 January 2011 update.

The purpose of this update is to highlight a possible interim bottom, as well as to forecast what is expected over the next +/- 30 trading days.

See the chart below:

The chart is really self-explanatory. The chart features a follow-up of the fractal presented in the 27 Jan 2011 update. I have marked points a, b and c to show the similarity of the two fractals. Also notice that point c on the first fractal was on day 33, from the bottom (at point b). It is interesting that the suggested point c on the second fractal is also on day 33. This is why I feel so strong that yesterday (day 33) was probably the bottom. If it goes lower, it should not be much lower, as well as only be a quick drop.

I expect gold to really start rallying tomorrow, and  should be at or close to the $1600 level, by at least the next 30 trading days. I also expect the gold miners to outperform bullion.

May God bless you.

Thanks and warm regards,

Hubert

Rand Gold Price vs JSE Gold Index by Hubert Moolman

Below is a chart that compares the Rand gold price to the JSE miners (JSE Gold Index):

The blue(ish) chart is the Rand gold price and the black one is the JSE Gold Index. I have indicated similar “fractal” positions, which indicate that we are at a point in time where both charts should rise significantly. The other important point to note is the fact that the JSE Gold Index should catch-up with the Rand gold price over the next 18 months or so, just like it did from late 2001 to middle 2002.

Warm regards

Hubert Moolman

http://hgmandassociates.com

JSE GOLD MINERS INDEX

JSE Gold miners are almost in the mania zone. Soon prices will rise faster than almost anything else. See my fractal analysis below:

Warm regards

Hubert

Protected: Gold Update 16 December 2010 – $10 for access

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The South African Gold Run

Just a follow-up on my rand gold price forecast. My forecast is progressing rather nicely. The price is making all the right technical moves.

Below is a 5 yr chart (from gold price.org) for the SA rand gold price:

Price is making its way up towards the target line, which is currently at about the R 12000 level. The upward move should start to accelerate from here.

Below is a closer look at the SA rand gold price chart (2yr):

 

I have indicated what I perceive to be a cup and handle formation. Read more about this formation here. This is a very bullish formation, and confirms the longer term forecast, dealt with in the previous chart. The target for this pattern is about the R 12 300 area. From here, price could move fast to about the R 10 700 area, have a break and a pullback, until it continues the march to the plus R 12 000 level.

It is an exciting time to be a gold investor, since returns should come big and fast. It is even more exciting to be in gold stocks, since they should come even bigger and faster.

Find more information about my free and premium service. I share my research on the gold, silver and general markets, via this free and premium service. Please check it out? You might just find it very useful.

Warm regards

Hubert  Moolman

Gold/Platinum Ratio And Economic Weakness… by Hubert Moolman

Most people are mainly concerned with what is going on right now and are less concerned with what happened yesterday, last week or last year. The further in the past an event or development, the less are we concerned about (or aware of) it, and the less is our understanding of it. This appears to be our nature, and it causes many to miss important “big picture” developments.

Here, I would like to discuss one such development and at the same time highlight the outlook for economic conditions over the next few years.

Platinum has been a star performer since the beginning of this century. From about the year 2000 to 2008 it went from just under $400 to a high of $2200. That is an incredible rally, and possibly unrivaled during that period by any other metal or investment class. What is discussed here for platinum holds true for many other assets, even fiat money, but in different aspects, and to various degrees.

Since about the turn of the century, platinum has become the prestige metal. Even credit card companies got into the act by replacing gold cards with platinum cards as their premier credit cards. This, together with platinum’s subsequent rise, ensured that the world became almost platinum crazy.

Even here in South Africa, where we have such an exciting gold history, it became evident that platinum was considered the “new” gold. It appeared that gold took the backseat and platinum enjoyed a new elevated status.

A lot of this fascination with platinum was due to it again becoming more valuable than gold. This platinum mania was indeed justified due to its stellar price performance, especially versus gold. However, it is this very fascination and mania that prevents many from seeing what has been developing over the last 40 years or more, and is now about to conclude (over the remainder of gold’s bull market). Many will be surprised at the impressive gold miner rallies, straight ahead, which will come despite weak general markets.

To understand this development, it is important to understand what the outlook is for the world economy over the next decade. I refer you to my view of the world economy for the next several years.

It is even more important to understand the underlying fundamental cause of this development, since most other factors, like the state of the world economy, are merely symptoms of the “wrong.” This and other articles on my website should help you understand the underlying cause of most of our economic problems.

For most of the last century we have had a corrupt monetary system. This corrupt debt-based monetary system has been suppressing the price of gold for at least the last 80 years. Fiat money and fractional reserve banking are main features of this system, which is the chief underlying cause of most of our economic problems.

This system is now in its 11th hour, and so are all those trends that have come about due to its existence. One such trend is: platinum consistently getting more valuable than gold. There are many more, such as gold and gold mining shares as a percentage of global assets decreasing significantly since at least 1981, having plummeted from 26% of global (investment) assets in 1981 to just 0.8% in 2009, according to Sprott Asset Management.

It is important to note that there will always be such trends, such as increase or decrease between gold and other asset classes; however, under a proper monetary system they will not be as out of balance to the extreme that they are under a debt-based monetary system.

Below is a long-term gold/platinum ratio chart.

 

chart comes from sharelynx.com

During the gold bull market of the 1970s, it is clear that this 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. I have said it before, the same conditions that propelled gold and other commodities higher during the 70s are present now.

These factors are pushing gold higher now and will continue to do so for many years to come. I certainly expect the gold/platinum ratio to trend higher, just as it did in the 70s. As you can see on the chart, the trend for this ratio has begun moving higher in 2008, and like it did in the 70s, it will accelerate as we move along in this bull market.

The great debt bubble of the last century peaked in 1999, when the Dow/gold ratio peaked. This was the tipping point, which signaled the end of the prosperity that was built by this debt. This was soon confirmed, when gold bottomed, and started an uptrend that continues to accelerate. Likewise, in the middle of the 60s, the Dow/gold ratio peaked, whereafter the link of the dollar to gold was removed and gold started its upward march in the 70s.

We are on a downward economic activity trend, and this should accelerate and continue until debt levels are acceptable for a new economic boom. I believe this will take at least 10 years.

Despite the fact that commodities, like platinum, will outperform most asset classes over the next years, I believe that they will still depreciate significantly as compared to gold (and silver). This is basically what happened during the 70s and is also what happened during the great depression. I have written about  the similarities of the great depression, the 70s and today.

Below is a chart that shows the cyclical downturn(s) of industrial production in the US over the last 50 years.

 

You will notice that during the two parts (70 to 75 and then 76 to 80) of the gold bull market, industrial production turned  down significantly. Also, note that the downturn occurred towards the end of those gold rallies and, in the case of the second one, continued until after the end of the gold rally.

Back to the long-term gold/platinum ratio chart

On the chart, you will see a 25-year down-trend resistance line, which was broken in 2008. In textbook fashion, the ratio has moved up quickly since then, whereafter it has returned to test the breakout area. A quick move to 1 is expected very soon, and it would go a long way in confirming that the trend in this ratio is unfolding very much like the one of the 70s and is likely to continue throughout this decade. 

I believe that the ratio will reach the 1.4 level faster than many would believe (if they believe at all) and that it will go on to reach levels unimaginable for many, because they are unable to comprehend the long-term developments. I just wonder whether banks will revert back to gold credit cards as their premier card. Actually, I wonder if banks will still be around.

Warm regards and God bless–

Hubert

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

Please visit my blog and website for more of my work, as well as my free and premium service.

http://hgmandassociates.com/

You can email any comments to hubert@hgmandassociates.co.za

South African Gold Miners, Dollar/Rand Rate and the HUI by Hubert Moolman

US dollar/SA exchange rate

The Dollar/Rand exchange rate is a very important rate for South African gold miners, as well as an important proxy for gold miners in general. Together with some other indicators, this ratio can tell us when gold miners are about to increase in real terms—that is, as compared to all other asset classes (including gold itself). When this happens, you really want to be in gold miners.

I can tell you that by all indication, especially my unique fractal analysis, we are entering such a time. This article is an attempt to illustrate why I think we are entering the time where gold (and silver) miners will be the best performing asset class over the next many years.

Below is a 5-year US dollar/SA rand chart.

 

On the chart, I have highlighted two fractals (pattern 1 and 2). The period over which each of these patterns formed can also be viewed as a cycle. If my comparison of the two fractals is correct, then we are now at the beginning of a new cycle.

To show the similarity of the two patterns, I have marked similar points (1 to 4) on both patterns. We are now just about after point 4, and this would represent the bottom (5 November 2010). From here I expect the rate to rise, thus giving JSE gold miners leverage on the gold that they are selling.

Remember that a significant part of JSE gold miner’s cost is in Rand or non-USD currency, whereas they get Dollars for the gold that they sell. Of course, this is not the only condition needed for gold miners to prosper.  Margin (revenue less cost) is king in any business and no different for gold miners. Their margins are most favourable when the gold price is rising in real terms.

The gold price is currently rising in real terms and should continue to do so for at least the next 5 months. In fact, I believe this increase in real terms will accelerate over the next 5 months due to the deflationary conditions that I expect from now to about April next year.

Expected timing and target for the US dollar/SA rand exchange rate

Below are two charts which zoom into the last part of the two fractals presented on the first chart of this article. (The full analysis continues for subscribers and pay per article clients only.)

 

 

JSE Gold Index

Below is a chart of the JSE Gold index that I did awhile back. I have highlighted two possible matching fractals. The commentary on the chart is self-explanatory. Note that, since then, the index has broken upward out of the flag.

This chart and fractal analysis is consistent with my expectation for gold miners. It also illustrates why I think the rallies in gold miners will be explosive. The expected timing and price targets will be made available to my premium subscribers and pay per article clients.

 

Below, I have done the same analysis for Anglogold (in S. African rand). The note on the chart is also self-explanatory. The reason I have used Anglogold is to illustrate a fractal on the HUI, which you will see on the last chart. Again, the pennant/flag has broken out since then.

 

 On the last chart, I have the HUI compared to Anglogold (in US dollars). Again, I have highlighted two possible fractals and marked points 5, 6 and 7 on both. For Anglogold, these points also correlate with points 5, 6 and 7 on the Anglogold (in S. African rand) chart. The HUI has of course also broken out of the line drawn since then.

This analysis presents a similar view as to what should be expected for gold miners, as presented under the JSE Gold and US dollar/South African rand analysis. The HUI should increase significantly in value over the next many years. The expected timing and price targets for the HUI will be made available to my subscribers and pay per article clients.

 

Warm regards and God bless

Hubert

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

Please visit my blog and website for more of my work and premium service. http://hgmandassociates.com/

You can email any comments to hubert@hgmandassociates.co.za

Silver Update 27 October 2010 Preview

Silver Update 27 October 2010

By Hubert Moolman

Silver is in a similar position as to what gold was in around this time last year. See the chart below for an illustration of this similarity.

 

I have highlighted the perceived similar spots, from 1 to 3. Note that silver is the top chart. From 1, where both silver and gold made a significant top in 2008, it has taken silver about a year longer than gold to pass that top, or the red line drawn from the top. Silver has to make up for that year, and we will see it in price action, as we have already seen in the last 2 months. This is very much consistent with the behaviour of silver as compared with gold, as in the late 70s & early 80s when silver made most of its gains towards the end of the bull market.

It is likely that the silver price is chasing the blue line, in a similar manner to what gold did last year.

To continue reading, please contact me for details of the pay per article service.

Warm regards and God bless,

Hubert Moolman

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

You can email any comments to hubert@hgmandassociates.co.za

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