The technical situation is ultra-bullish for both gold and gold stocks. Sentiment indicators…continue to show [that] the dollar is poised for a serious decline and the MACD on the gold chart is giving one of the most powerful buy signals in the history of the bull market. The GDX should reach $75 a share by year-end and gold should push to new highs in the $2000 area by January of 2012 [while silver] could possibly be the best investment opportunity available to investors for many years to come! [Let me explain and back up my comments with an array of charts.] Words: 781
So says Morris Hubbartt (www.SuperForceSignals.com) in his most recent Weekly Market Update* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Hubbartt goes on to say, in part:
The U.S. Dollar
Sentiment indicators…continue to show [that] the dollar is poised for a serious decline. My technical work continues to project a 65-66 longer term target. This dollar forecast, if it even plays out partially, is enormously bullish for hard assets. See US Dollar Chart Sentiment
The correction in gold has been healthy and necessary. A significant rebalancing market sentiment has occurred, putting the gold market in a powerful stance. The MACD on this chart [See Gold Super Highway Chart] is giving one of the most powerful buy signals in the history of the bull market.
Leverage has been greatly reduced because the speculators have been “stop lossed” out of the market, in size. Gold held strongly without the support of these leveraged speculators, and this is the exact situation that sets the stage for a major advance.
When the traders with the most money (the commercials) step up the size of their investments, that has historically been the time to employ capital, rather leverage your position for a quick trading gain. The gains that occur when the market is positioned as it is now can be absolutely enormous.
Gold Miners Bullish Percentage Index
I’m using a number of charts this week to demonstrate the oversold and undervalued nature of the entire precious metals sector. The $BPGDM is the “gold miners bullish percentage index”. It is an index designed to show the bullish or bearish posture of gold stocks.
With this chart [See $BPGDM Against Gold Chart] I’m using the RSI indicator to demonstrate a historical key bull market oversold reading coupled with an indicator, to show key turning points.
Substantially oversold gold stocks are indicated in the top portion of the chart. In the middle of the chart is the gold price, and I’ve highlighted what has been impeccable timing of the commercial traders.
The bottom line is that the technical situation is ultra-bullish for both gold and gold stocks.
Patience is required to win the prize in this volatile sector. The target for the GDX chart [See GDX Breakout Chart] in short term is $64. I’m projecting $75 a share for GDX by year-end, and $95 based on the h&s pattern. My longer term target (about 18-24 months) is $133.
GDX vs. Gold
This chart [See GDX Against Gold Bullion Chart] is quite dramatic. It is visual picture showing how undervalued gold stocks are in comparison to gold. The first target for GDX is the $64 area. From there to get GDX to the targets mentioned above, it will require gold to push to new highs in the $2000 area, which I am projecting will occur by January of 2012.
What volatility takes away, a disciplined buy/sell program will assist in getting back for you. The gold junior stocks are a sector in which it really does pay to buy weakness and sell strength to survive the volatility. Note the blue horizontal target area lines on the chart [See GDXJ Targets Chart]. Achieving both of those should put some zip back into your portfolio, and I’m very sure it’s going to happen!
Silver remains one of my favorite assets. I expect silver to trade with gold in the shorter term, followed by a “command performance”, similar to what we saw in the spring of this year. Technical patterns, sentiment, and smart money buyers indicate that silver could possibly be the best investment opportunity available to investors for many years to
143 analysts maintain that gold will eventually reach a parabolic peak price of at least $3,000/ozt. before the bubble bursts. Of those 143 a total of 103 see gold achieving a price of at least $5,000/ozt. and 20 predict that gold will reach a parabolic peak price of $10,000 per troy ounce or more. Take a look here at who is projecting what, by when and why. Words: 745
If you concur with the 159 analysts (see below) that maintain that physical gold is going to go parabolic in price in the next few years to $3,000, $5,000 or even $10,000 or more then you should seriously consider buying physical silver. Why? Because the historical gold:silver ratio is so way out of wack that silver should appreciate much more than gold as it goes parabolic in the years to come. Indeed, silver could easily reach $100 – $200 per troy ounce, maybe even $300 and conceivably in excess of $400 depending on how high gold goes. The aforementioned may be hard to believe but an analysis below of the historical price relationship between silver and gold suggests that such will most likely occur if gold does, indeed, go parabolic. Take a look. Words: 1423
A tsunami doesn’t start with a bang, but with a whimper. The first sign is a little hump in the water way out in the distance that is barely notable. Anyone who catches a glimpse of it simply continues to expect the day to be the same as the last many days – calm and beautiful waters along the shore. This is the point where we are, today in the Precious Metals sector. Many have seen the little roll of water out in the distance as Gold edged up in the first move of a more parabolic slope, yet most investors are mired in the same expectations of yesterday – a return for Gold to correct down into a lower base. Our analysis based on the fractal relationship to 1979 shows, however, that the mid 900s are a realistic target for the HUI by the end of the year or early in 2012; that $52 to $56 should be achievable for silver, with $58 to $62 as real possibilities; and that Gold should go the $2250 level followed by $2500 with the potential for $3,000, or a bit higher, now on the radar screen. Let me explain why that is the case. Words: 2130
When you just consider the downgrade of U.S. debt, the jobs problem, the housing situation, the European bank concerns and their debt crisis, the negative outlook for the global economy, not to mention that the Fed will likely seek new measures to help the economy, we just don’t see gold coming down any time soon, other than having a normal downward correction [as currently is the case. Let us show you why.] Words: 1102
By almost any measure, gold stocks are undervalued but should we load up? Gold mining companies are earning record margins. Stock prices, however, have not responded in similar fashion but when the broader investing community begins to take notice, investors will snap up these highly profitable stocks and push prices higher. The “catch up” in gold stocks could be tremendous but the question, of course, is timing. We don’t know when gold stocks will begin to catch up and the data don’t suggest they must rise right now or that they’ve hit bottom so should we load up just now? Words: 590
The behavior of the stocks of the various gold miners in recent times warrants special attention. Let’s take a look at the GDX:GLD ratio, the Gold Miners Bullish Index and the volatility of the currencies and stock market indices of the emerging markets where most of these mines are located and determine what they suggest as to what we could well expect in the performance of such stocks in the months ahead. Words: 585
Following the crowd has never been the reason to buy gold. After all, that same logic would have recommended buying a house in Phoenix five years ago. Since the fundamentals still point to gold’s long-term viability… why [are] investors responding by selling gold and buying dollars and euros? I was always told not to look a gift horse in the mouth… [so] take advantage of the dip. Words: 880
Millions of investors have stormed into US Treasuries. Some have even settled for negative yields on Inflation Protected Securities (TIPS). They are making a terrible mistake, [however,] because right now a handful of gold mining stocks offer much more upside and immediate yield than T-bonds. [Let me explain.] Words: 1119
Both gold and silver continue to trade well below their inflation-adjusted highs in nominal terms, and the market is now beginning to acknowledge the profit potential that precious metals equities offer at today’s bullion prices. We believe the equities will offer more upside than the bullion over time. Many of the smaller names are well priced and have momentum behind them. The prospects for gold stocks look extremely bright [for very good reasons. Let us explain.] Words: 2250
We have a financial system that’s on the edge of a cliff here. People have to be in precious metals if they want to protect themselves. Everyone who’s an investor has money. They have it invested in some paper instrument and when they realise they have a problem with their money in a bank or owning some government note the demand for gold could just be overwhelming! It could be parabolic all of a sudden. Currently, only o.75% of the world’s financial assets are in gold so just imagine what a 5% to 10% interest in gold would mean for its price. On top of that, I believe that silver will get back into a 16:1 ratio to gold in three to five years for sure so that means that silver is going to have a great upside potential. Got gold? Better yet, got silver? Words: 5169