Gold Forecaster Weekly E-Mail Snippet
Gold Market Breakout Alert!By: Julian Phillips & Peter Spina, for the Gold & Silver Forecaster
The Gold Price has confirmed that a large movement upward is shortly to occur.
1st March 2011
We noted that once the trading range between $1,320 and $1,380 broke through resistance at $1,380 it could move much higher in the coming weeks, months. We were going to alert you, but felt we should hang back and await confirmation that the high-risk area was passed and that we had confirmation that a strong move up was coming ($1,430+). We have now had that confirmation and can confirm to you our subscribers that a large move upward is soon to occur. Many leading analyst felt that a correction to $1,290 should come first, but we believe that, that has come and gone. We now expect to see a move to new highs now between $1,500 and $2,000 in 2011 with higher prices thereafter.
The fundamental picture is a combination of four gold-positive forces:
1. Persistent ‘limit’ buying [informing dealers of the price they will pay then waiting for offers to come to them, but not chasing prices] of gold by Central Banks and Sovereign Wealth Funds. This has been the case for the last year and more now.
2. Asian buying from India and China, where a rapidly growing Middle class is saving as always, but including gold in their long-term savings. This demand has become explosive and is set to dominate the market in the years to come. These buyers buy to hold, not seeking profits [the same as central bankers] but seeking financial security for their families. This has adjusted the shape of the technical picture as we have seen lately. A good monsoon has led to an increase in rural community buying of gold in smaller amounts [due to higher prices] of around 5.7% over last year.
3. The failure of developed nations to resolve their monetary problems has set the stage for more debt crises alongside those in the U.S. where States are about to experience their own. Food and energy inflation is ensuring negative interest rates [despite rates set to rise] and social disorder [as we are seeing now in the Middle East]. These will worsen in 2011 and beyond.
4. The inability of supply to grow despite the high prices we have seen. Newly mined gold is at 2,542.7 tonnes and will rise to just above 2,660 which is not nearly enough to satisfy demand. Recycling, or ‘scrap’ sales in 2010 was 1,652 tonnes 20 tonnes down on 2009. For this to increase to satisfy growing demand in 2011 we believe that the gold price must rise by 20+% and persuade current holders to sell.
As you know our newsletter follows our favorites gold shares, gold, silver, currencies, oil and has a portfolio for your reference.
Should you want us to track any particular stock for you, please let us know?
We feel that soundly based gold “Junior” mining companies will benefit strongly on the rise (please see more on gold stocks below).
1. Medium Sized: - Randgold Resources [GOLD]
- Goldcorp [GG]
2. Junior and Exploration Stocks
Gold stocks provide investors with a leveraged investment option versus the metal. Volatility has been a normal component of the gold stocks and with increasing volatility among all markets; this has only amplified the swings in the gold equities. So historically, gold shares will outperform the price on the upside and likewise on the downside.
There are many criteria a gold stock investor will look for when selecting an appropriate basket of gold companies. Those with a higher risk tolerance will look at junior and exploration gold stocks to offer extreme risk/reward investments. Yet despite the record $1,000+ gold prices, junior and exploration stocks are trading at levels significantly below pre-2008 sell-off levels. This is on top of growing prospects that gold is set to move significantly higher in the coming months, years. Also of consideration, gold mining companies have yet to heavily invest into exploration and development capital needed to replenish their declining production levels and reserves so market valuations are very attractive levels!
In our GoldForecaster.com Junior and Exploration Stock Portfolio, we research hundreds of companies looking for the right story with the proper mix of criteria that will provide among the lowest risk with exposure to high rewards. From management to share structures to the project themselves, many decisions must be made to select the right junior stocks.
To illustrate one of our recent gold junior selections, please refer to the Gold Resource Corp. (NYSE-AMEX: GORO) chart above. An example of one our very profitable low-cost gold producer stock selections, a significant and growing high grade gold deposit provided our newsletter subscribers the opportunity to participate in a 2,300%+ profit.
Over the coming weeks and months, new additions to the portfolio will be made as new opportunities are researched, investigated. Please subscribe to the Gold Forecaster to view our Junior and Exploration Stock portfolio.
As you know, we at the Gold & Silver Forecaster are dedicated to following these developments so that Investors can maximize their understanding and profits from the gold and silver [and platinum] markets. As a result we expect to see the gold market shine far brighter than we have seen to date.
If you have followed this newsletter and find our work to be valuable, we recommend that you forward this alert to your friends plus colleagues and encourage them to subscribe. Weekly issues will allow them to see which shares we believe will benefit investors the most and to keep your fingers ‘on the pulse’ of the gold price. Our coverage of the global economy is focused on the factors driving the gold price including oil, the $, and other relevant markets. We keep you updated and ahead!
We will always keep the global perspective with the focus on gold, making our letter “must-have” reading in these markets.
Kind regards,
Julian Phillips & Peter Spina, for the Gold & Silver Forecaster.
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