To: Goose94 who wrote (3016 ) 10/17/2013 11:01:31 AM From: Goose94 Read Replies (1) | Respond to Gold and silver are on the verge of a major move higher as the dollar is showing signs that it could crash into new lows. Even though the U.S. Government averted default, the potential uncertainty and deleterious ramifications on the economy could force the Fed to increase Quantitative Easing. Look for volume to reenter the gold, silver and junior mining market as investors look to get out of their dollars into traditional inflationary hedges. Investors may soon realize that Congress may avoid a debt default for now, but it is only a temporary solution as the economic problems are nowhere near solved. Be prepared for a “V” shape reversal in gold, silver and the junior miners which have been basing for close to three years and are very oversold. Investors may be a little early in claiming good times are here again. The global economy and debt situation remains challenging. Gold and silver appear to have found support and may be on the verge of a major reversal higher. Look for a reversal above $1300 to break the recent seven week consolidation. I like silver even more than gold as demand is increasing for this white metal as an alternative to fiat currency and for its rising industrial applications. A breakout could occur past $22. Silver is in a three month uptrend which has stayed intact. A correction in the overbought equities especially biotech, housing and banks could cause precious metals to regain its luster. We have been seeing an outflow from the gold and silver ETF’s as investors may be looking to the miners which are historically discounted compared to the bullion price. The miners may be making a double bottom here. Gold and silver may successfully bounce off the June lows. I expected this last minute agreement which will kick the debt can down the road. People may begin to think, do our representatives really know what they are doing? Is this all just a show? Are they playing with the masses minds? For many months, we have heard that the Fed may taper quantitative easing through many mainstream media outlets. Now the time has come when the masses may have already priced in a reduction of quantitative easing, not realizing that quantitative easing may actually increase and is ongoing. The Fed may have used the taper terminology as a tactic to keep inflation and precious metals subdued. I believe there are growing concerns of a reinflated housing and financial bubble on the verge of a double dip. The equity markets have moved way ahead of the economy where we see a record numbers of Americans who are exiting the labor force and are becoming unfunded liabilities. The U.S. debt crisis is not over. Look at Detroit and many other cities in or on the verge of bankruptcies due to unfunded liabilities. All across the U.S. deficits are rampant. Debts are strangling cities and municipalities. How soon investors forget that only a few months ago Detroit, the industrial and auto manufacturing center of the U.S., became the largest municipality in U.S. history to file for bankruptcy with unpaid debts of over $18 billion. The Fed needs to protect these cities on the verge of bankruptcy by manipulating interest rates lower. This is done through quantitative easing. Talks of taper over the past few months have crushed U.S. bonds with yields doubling over the past year. I called the top in treasuries back in July of 2012 as I realized the Chinese, Russians and many other emerging nations holding U.S. debt want to sell and avoid a decline in the United States. The Fed does not want this and will try its utmost to prevent a rise in interest rates as more cities and states could possibly file bankruptcy. More municipalities going under could put a lot of pressure on unemployment. Over the past fifty years the U.S. has sent its industries offshore resulting in a massive transfer of workers from manufacturing into government. The jobs number was awful with the unemployment rate going down for the wrong reason. More employees are leaving the work force. Rising interest rates could initiate the next decline in housing. The Fed must be very careful as they fear rising rates could spark more bankruptcies, higher unemployment and pop the reinflated housing bubble. Look for gold and silver to bounce higher, which have been correcting since the July-August rally due to fears of tapering. However, I expect a bounce to occur. There are just too many black swans, the Middle East crisis with Syria and Iran is not over and the risk of rising inflation globally is greater than ever as countries deal with debts gone wild. Look for a rally in high quality junior miners advancing top notch gold and silver assets in friendly mining jurisdictions. What we may be witnessing now is just the beginning of a major rally in gold as local, state and now the federal government deals with bad debts brought on by years of reckless spending. Acts of terrorism and violence are becoming more commonplace around the world. Gold and silver has proven itself throughout the history of mankind to be one of the only assets that is stable in a shaky world. Gold may have bottomed at the end of June after going below $1200 as shorts began to cover their positions and as tensions with Syria heated up. Recent weak economic data combined with debt woes should continue to support an accomodative Fed. This recent shutdown should push off any taper indefinitely as unemployment numbers are not improving. Equity markets could correct from these overbought levels and gold and silver could outperform towards the end of this year. Watch silver which is forming a bullish cup and handle pattern. A breakout could be imminent. Look for a Bullish MACD crossover and a break above the 6 week downtrend. The three month uptrend should hold here. We can observe that the June and August gap has been closed. This could be an area of support. Remember a credit downgrade and/or further weakness in the U.S. dollar and bonds could lead to a precious metals frenzy. Gold and silver have now been basing for over two years since the last debt debacle in Washington when gold hit $1900 an ounce. Don’t be surprised to see economic uncertainty cause a parabolic rise in both gold and silver possibly into new highs in early 2014. This decline over the past three years was prompted by the end of QE2 when the media programmed the public that The Fed will end quantitative easing and dollar devaluation. Just the opposite occurred. QE to infinity was announced and still The Fed and the media try to jawbone the public to believe that they will exit quantitative easing. The Fed has made it appear the markets have recovered but I am still very skeptical. Between the gridlock over Syria and Obamacare, investors may be growing weary of their faith in the U.S. dollar and bonds. This is a divided country. Astute investors may begin moving to precious metals and mining equities which are reaching historic oversold levels. For over a month I have alerted my readers to prepare for a rally in precious metals following the Mid-October deadline over the debt ceiling which could put gold and silver back into the limelight as Central Bankers prepare more QE. Gold and silver have been manipulated lower by fear-mongers who claims that the gold bubble has burst and that the Fed will tighten. I continue to disagree with this view. The long term trend in precious metals remains higher and tapering should not occur as the U.S. deals with gridlock and needs to pay off soaring debts and the costs of Obamacare with cheap dollars. It may be time to continue buying the highest quality junior miners trading at historical lows.Gold Stock Trades
