Projected Silver prices & PMS
The fundamental factors were incredibly bullish for Gold running into 2011 and after that, but Gold did not respond. What happened? Even though the money supply was being inflated at a mind-boggling rate, the velocity of money had slowed down. Money was not changing hands fast enough, in other words, the masses had no access to easy money. Hence, Gold tanked, as deflationary forces set in. These forces are still at play, and that is why we are neutral on Gold stocks but bullish on Gold and Silver bullion.
Very Interesting Read: Perception Wars; You see what you are directed to see
How did the Fed knock the hell out of Gold? They brought the velocity of money to a standstill and allowed deflationary forces to set in. That was the end for Gold. So until M2 starts trending upwards it is likely that every Gold rally will fail.
The markets are totally controlled and manipulated; every boom and bust cycle was planned in advance of the event. The chart below illustrates that the economy is far from healthy, in fact, it appears to be almost in a coma and is being forcefully kept a life through immense injections of hot money. Take away the hot money and this illusory economic recovery crumbles; if a market is healthy the velocity of money increases and vice versa. Look at the chart below, the velocity of money is dropping like a falling dagger.
Until the M2 starts to trend upwards or Gold closes above $1350 on a monthly basis, every rally in Gold will fail.
Projected Silver prices and PM’s Update July 2019
We have a bullish MACD crossover on the monthly charts, and for the first time years, the trend is mildly positive. Now if Gold manages to close above 1500, then a test of the 1800 ranges with a possible overshoot to 1920 is likely. Silver is a laggard, and it will only start to take off after the action starts to heat up in the Gold markets, but Silver is likely to outperform Gold Bullion in percentage terms. The pattern (currently) is stronger for Bitcoin than it is for Gold; however, things could change fast. In the short term time frames though Bitcoin investors should consider waiting for Bitcoin to let out some steam before deploying new capital.
When it comes to Gold stocks, GFI looks interesting, and it is also the fourth-strongest stock in the sector in terms of relative strength. Entry points in the 4.50-4.70 ranges would be a good place to establish a position.DRD is another interesting play, albeit one that carries a bit more risky due to its volatile nature, and it would make for a good long in the 2.90-3.00 ranges
Projected Silver prices and Precious Metals August 2020 Update
What we stated above in our July 2019 update has come to pass. Gold has surged to new highs and in doing so it has paved the way for Silver to trend higher. However, Silver needs to trade past the 29 to 30 ranges on monthly basis. In other words, Silver bullion needs to close above those ranges (preferably 30) on a monthly basis. If it can achieve this it will pave the way for a test of the 42 to 45 ranges with a possible overshoot all the way to the 55 to 60 ranges.
In the short, to intermediate timelines, the precious metals are trading in the overbought ranges so they are likely to consoliodiate for a few months. furthermore the dollar is showing signs of putting in a bottom and could rally for the next 6 to 9 months. If PM’s can rally in the face of a stronger dollar, the it will change the outlook and indicate that Gold and silver are finally in true bull markets and that the dollar no longer plays a major role in determiing the price trends of both.
Determining a price forecast for Gold Using GLD’s Chart
Once the Consolidation phase is over, and if Gold can close above 2400 on a monthly basis, it will have a real short at challenging 3000 to 3300 ranges.
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If powerful forces in Asia begin a sudden liquidation of dollar-denominated equities and bonds, won’t that also ignite Dollar velocity, albeit temporarily?
It could but too much emphasis is placed on Asian forces liquidating massive amounts of dollar-denominated assets and like you stated already the effect would be temporary. We believe the Fed will increase the velocity of money by lowering lending standards and making it suddenly easier for the small guy to get home and small business loans.