Special Report: Gold to $16,000: The Power of the XL Gold Cycle

We are in the formative stages of a massive gold bull market.

It will be bigger than every other gold run... ever.

It's going to be so big, in fact, that I'm predicting gold will go to $16,000.

Don’t believe me?

Think the idea of gold going to $16,000/oz. is absurd?

Well, you’re probably not alone. But for those of us who already know how the “XL Gold Cycle” works, it’s not crazy at all.

You see, for the last decade, I’ve been closely researching something known only to a handful of insiders as the XL Gold Cycle.

It’s a pattern that signals shifts in political dynasties and economic schools of thought, a pattern that goes back nearly 200 years.

Take the great gold bull runs of the 1970s and '80s...

You probably remember gold racing to a record high.

What you might not know, though, is that those runs were a part of the XL Gold Cycle.

Now, nearly 40 years later – right on schedule – all the pieces are in place for the biggest XL Gold Cycle ever.

The Golden Ratio

The truth is, right now, gold is terribly undervalued.

For proof of that fact, just look at the Dow/Gold ratio.

This simple measure is a way to value gold based on real terms., not hypothetical ones.

The historical average of the Dow/Gold ratio is 4:1.

That means, on average, the total value of the Dow is four-time the price of gold.

Well, with the Dow near 18,000, like it is right now, gold ought to be trading around $4,500 per ounce (18,000/4 = $4,500). That's markedly higher than the $1,200 an ounce gold is currently valued at.

But now, here's where things get really interesting...

During XL Gold Cycles, the Dow/Gold ratio tends to gravitate towards a 1:1 ratio.

That's exactly what happened in the 1930s and the 1970s — the last two XL Gold Cycles.

Indeed, on January 21, 1980, while the Dow was valued at 872.78 points, gold hit $850/oz., or nearly a 1:1 ratio.

If that happened today, it’d put gold all the way up to $18,000 per ounce.

Hence my prediction, that gold's ultimate destination is slightly below that, at $16,000.

Again, this isn't a wild guess. There's historical precedent for such a climb. It's happened at least three times already.

Generational Gains

For example...

The first time the XL Gold Cycle turned over was back in 1895, when the post-war railroad boom triggered a series of bank failures and a run on gold.

One man, Richard Wiesel, caught on early and saw that gold demand was set to skyrocket.

While he could have just bought and held bullion, which is a fine tactic, Wiesel saw an even better opportunity...

He purchased a position in the Portland Mining Company.

As the Wall Street Journal reported back on August 5th, 1895, Wiesel "sold his entire holdings, amounting to 142,000 shares for $1.00 per share."

By doing so, Wiesel was able to leverage the XL Gold Cycle for a $142,000 payday.

That's about $3.9 million in today's dollars.

And that's just one of a handful of life-changing gains that came in first XL Gold Cycle. There were others, and even more in 1944, when the next cycle hit. And even more in the 1970s and 80s.

In fact, in 1981, despite mistiming the cycle by a couple of months, an Australian resident by the name of Noah Walker invested a few hundred dollars in gold prospecting.

His investment soon delivered a $117,000 return (about half a million dollars today).

That's what happens during an XL Gold Cycle.

Gold ran from $193.22 in 1978 to $612.56 in 1980.

So really, Walker was a bit late in 1981 with gold trading at $460. If he timed the cycle correctly, he could’ve made a third more than he did.

And when the cycle turns over for the fourth time (the gears are already in motion), I believe the profits I just showed you will look like peanuts.

Delaying the Inevitable

You see, even though the XL Gold Cycle happens like clockwork, it can sometimes be thrown off by politics.

The best example is the period from 1933 to 1975, when Americans were not legally allowed to own gold bullion.

For decades, the gold market was artificially suppressed by the government.

But with the end of the gold standard in the 1970s, the market was finally allowed to seek true value, sending the metal sky-high.

Gold shot up from $35.94 in 1970 all the way to $612.56 in 1980 — a gain of 1,604%

And that’s exactly what will happen in the months and years to come.

Indeed, the XL Gold Cycle is already starting to turn over. Signs of it could be seen in 2011, when the price approached $2,000 an ounce.

But again, all of the government's “stimulus” measures and market manipulations have suppressed gold's price.

Ultimately, though, you can't stop the gold cycle from occurring. You might be able to delay it, but doing so only adds more fuel to the inevitable surge.

Even if gold doesn’t hit $16,000/oz. exactly, there is no doubt that it will go up massively.

With that knowledge, you could just buy gold and wait for it to go up. And you’d do pretty well for yourself.

But if you look back at our examples of gold cycle-created wealth, you’ll remember that those who got the richest didn’t necessarily own gold.

Like Richard Wiesel and his $3.9 million payday in mining stocks.

It's important to remember that while gold is incredibly undervalued, it still has a high entry point.

In truth, you'd be better served with cheaper options than bullion.

That's why the way to get maximum profits from gold's coming rise is with gold miners.

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