2014 Gold Price Forecast
Catch the Coming Gold Rally
Earlier this week, we showed you why silver was blatantly being manipulated.
Editor Adam English explained JPMorgan's massive short position, and how they covered almost all of it without the price of silver rising. The crooked bank unloaded the positions using high-frequency trading, flooding the market with thousands of low sell prices in a matter of seconds.
As the market followed those prices lower, the bank's algorithm switched to buy mode — and in an instant bought up contracts at prices it had intentionally manipulated lower... and walked away with a $3.6 billion.
Even today, JPMorgan holds 25% of the silver short market. And records indicate that paper positions outnumber the actual amount of physical silver traded by more than 140 times.
It's not hard, then, to understand why silver prices have headed lower, despite record physical demand...
So has buying precious metals become futile? Hardly.
Actions have consequences. Sometimes not immediately, but always eventually.
At its peak, John Paulson's hedge fund owned 31.5 million shares of the SPDR Gold Trust (NYSE: GLD).
Though that position had been trimmed to 21.8 million shares by the end of the first quarter, Paulson — who made the so-called "Greatest Trade Ever" by shorting subprime mortgages in 2006 — has certainly still taken a beating on the yellow metal.
But he's still not deterred, telling investors at a conference this week that:
Although the Fed has printed a lot of money to date, there's very little inflation. People who bought gold in anticipation of inflation have lost their patience. I would say that the rationale for owning gold has not gone away. The consequence of printing money over time will be inflation, it's just difficult to predict when.
He added that the slip toward $1,200 gold is only "a pause period" in the bullish trend, and that, "If you're looking for a hedge against potential inflation in the future and have a longer-term view, gold is an important part of anyone's portfolio."
And while Paulson would not shed light on when he thinks metals will stage their breakout, 58-year market veteran Ron Rosen shed away this week...
$148 Silver, $4,300 Gold?
Speaking to King World News this week, Rosen said:
We are on the verge of the biggest move in the history of the precious metals market, and it's not far away from beginning. It's going to be a monster move....
What I don't understand is why everybody doesn't see it. There are so many analysts out there and if they just knew how to look at a monthly chart, and put it in a logarithmic form, they would see that gold and silver are going to explode.
This explosion higher in the price of gold and silver will just be Mother Nature at work, and there is nothing on the face of this Earth that can stop it — no individual, no central bank, no country, and no collection of countries.
And the timing?
We are looking at a massive move in front of us that will top sometime in 2014. At that point there will be a correction. Then, a massive blowoff will take us probably into early 2016. People who have been tortured by this long corrective phase, they will be thrilled if they have the ability to hang on. They just need patience here.
I expect the gold price to hit $4,300 in early 2016, but the really fascinating thing here is the silver chart because there have been three peaks. The first peak increased two times from the previous low. The low was $4.01 and silver went over $8 in that move. The second peak was $21.44. So silver increased four times the previous low, which was $5.45. The third peak was $49.82, and that was six times the previous low, which was $8.40.
You've got an old guy like me who has been at this business for almost six decades, and he sees 2, 4, 6. There's only one number that comes up next, 8. We then multiply 8 times the low of $18.17, and we have a silver price of over $148 sometime in early 2016. It's as clear to me as the sun rising and setting.
Of course, as go gold and silver prices, so go the miners.
And with so many companies right on the cusp of their break-even points, I expect will see more than a handful of bankruptcies in the junior mining space over the next few months.
Those that make it through will make it big.
Rosen thinks miners are going to be the best-performing stock group going forward, adding that the Gold Bugs Index (NYSE: HUI), which is currently trading around 252, "will be trading in the thousands before this bull market is finished."
How can you benefit?
By buying gold and silver, of course.
But in today's high-demand environment for physical metals, high premiums can make doing that cost-prohibitive.
We sent you an offer to buy gold at spot this week to help alleviate that.
Even better, our researchers have found a way to compound gold's coming gains. Using this strategy, you can multiply the percentage gained by gold bullion by factors of 5, 10, 20 — even 50-fold or more.
If you're interested, be on the lookout for more details next week before prices begin their ascent once more.
Call it like you see it,
Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.
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