Is this the beginning of the new Up leg in gold?
Why 2013 ?
(Credit below to James Turk)
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GOLD CURRENT TRADE
A monthly close above 1804-1835 would favor that the new up leg has begun. Until that time, we cannot say that it has. According to Gann Global in a public webinar I watched, gold has never gone above a POST all time high without achieving a new all time high. Thus nothing is certain but the odds would be on golds side for a new up leg to begin.
The bull market is not over and this is the last big correction for gold before it begins its final trek higher beyond 2015. The stage is set for a big move before this all ends. However, any sovereign default or money panic could set off the mother of all deflationary events in a liquidity squeeze. It is the ONE THING we thing that can bring gold to a major correction as we saw in 2008. It does sound like a very likely event for gold bugs and most of us for that matter. But we correctly anticipated it in 2008 and we would still favor it if the situation arises in 2013.
A close below 1470-1500 and we have a caution flag to pay careful attention and that price point puts the Seasonal Rally in serious question.
A close below 1400 gets our full attention if the fundamentals for a liquidity squeeze is on the horizon. The most likely time if it were to begin/happen would be in 2013 with September as the ideal time (or around that time).
Until we see a MONTHLY close below 1400 its not on the radar but until we get back above 1804-1835 it will be in the back of our minds on a constant attentive watch.
Because the high in gold for the
19th century was 144 years ago, in 1869.
19th century was 144 years ago, in 1869.
During the reconstruction era after the American Civil War, the United States government issued a large amount of public debt to finance construction. It was generally believed that the U.S. Government would buy back the “greenbacks” with gold. In 1869, a group of speculators, headed by James Fisk and Jay Gould, sought to profit from this by cornering the gold market. Gould and Fisk first recruited Grant’s brother-in-law, a financier named Abel Corbin. They used Corbin to get close to Grant in social situations, where they would argue against government sale of gold, and Corbin would support their arguments. Corbin convinced Grant to appoint General Daniel Butterfield as assistant Treasurer of the United States. Butterfield agreed to tip the men off when the government intended to sell gold.
In the late summer of 1869, Gould began buying large amounts of gold.
Gold began rising in mid-September, and the price rise quickened the week of September 20th. Gould got some newspapers to help him in his task by printing stories that a gold squeeze had begun. By Thursday, gold had risen to the low GB$140’s, but the real fireworks began the next day, September 24th, what has become known as Black Friday.
Brokers acting for Fisk and Gould began the day by wildly bidding up gold from its GB$145 opening price, and those creating the corner stood to make a fortune. Using derivatives to maximize their leverage, Fisk and Gould controlled calls on 5.5 million ounces of gold with a face value of $110 million, an amount equal to the US Treasury’s entire gold reserve at the time. It was without any doubt an enormous leveraged position, and Fisk and Gould stood to make GB$5.5 million on every GB$1 rise, and rise it did.
Panic was spreading throughout Wall Street, as the price rose relentlessly that fateful day. These manipulations affected every part of banking and finance. Many faced ruin as gold began to soar, and the margin calls began to mount.
The gold price had risen to GB$162, when James Brown (who with his brother took over the firm started by their father, which exists to this day as Brown Brothers Harriman) stepped up to the plate. He sold 250,000 ounces to a Fisk and Gould broker at GB$160. Others alertly sensing a change in momentum also stepped in on the sell side. The gold price began dropping.
Shortly thereafter, the US Treasury announced that it was selling gold in exchange for greenbacks. When this news hit the floor of the NYGE, the rout began. Gold closed that day at GB$132 and the squeeze was over. Sixty-four years would pass before the next key event in gold’s history when the US government made holding gold illegal for US citizens.
The Gold Super Bull Market
The chart below shows the current Super Bull market we are in. The story you just read above shows on the chart in 1869 at the culmination of the last bull market in gold.
The current Five wave bull market began a Gann master cycle 80 years ago in 1933 when Gold was confiscated. That is where wave one begins. We are now in the fifth and final wave of the Debt cycle.
GOLD CURRENT TRADE
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Our Position
Bought 1Apr Gold on 25/03/2013
Entry: 1592
Stop : 1578
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SILVER CURRENT TRADE
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Our Position
Bought 1May Silver on 01/04/2013
Entry: 27.90
Stop : 27.30
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YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
