Gold $500 By November?

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500 by November?

Posted Thursday, October 21, 1999 at 09:51 AM EST

by James Turk

Freemarket Gold & Money Report

As expected, aggressive bidding emerged at the Bank of England auction on September 21st. Also as expected, once the $262 resistance level was broken, Gold was driven quickly higher by a missive short covering rally.

Is the rally over? No, not yet. In fact, I think it is only beginning. Here are my targets. At a minimum I expect Gold to touch at least the $350-$360 area. At a maximum? Well, who knows? But I would not be surprised if this rally climbs all the way back to $500, a price not seen since 1987. What's more, we won't have to wait long to reach these higher prices.

The peak price of this rally, whatever that level turns out to be, will I expect be reached within the next 4-5 weeks. What? Gold at $500 by November? Yes, it is a realistic possibility.

A bear trap has been formed, which has developed pretty much as expected. What happens now? Everyone who sold Gold when it broke through the major 17-year support zone below $280 must now buy it back, It's a classic bear trap, and it was formed during what in all likelihood will prove to be Gold's bear market low. In other words, I don't think we will ever see Gold once again trade under $280 per ounce. A bold statement?

I don't think so because we know that Gold is fundamentally very undervalued. When looked at from this point of view, all I'm saying is that we will never again see this extreme level of undervaluation, which is not an unreasonable conclusion. So far Silver has been very quiet, letting Gold take center stage. However, don't be lulled into complacency because beneath the surface, Silver is bubbling along, and is very near a boil. The lid is about to fly off this boiling pan as well. Silver is ready to break out of its massive 13-year accumulation pattern. We could see my long-standing $10 target by November, along with $500 Gold.

-- Andy (2000EOD@prodigy.net), October 23, 1999

Answers

Andy,

James Turk has been around for years saying the same-O-same-O. Gosh, it's scary, reading something so similar to what he and other "goldbugs" wrote back in 1985 ... to the effect that we'll never see Gold below $300 again once it gets back over $300...buy now before its too late... and then of course gold managed to get over $400 in the next 3 to 4 years. These guys are absolutely "nutso." IMHO.

Gold is not looking so good technically. In fact, while there might be a bear trap, the oscillators are on the verge of turning around & giving a major bear signal. The chart formation after this past week's action is now looking more like the market is going to go back and retest the lows. NOW... THIS IS NOT NORMAL. THE CHARTS ARE SHOWING ABBERRANT AND ABNORMAL PATTERN FORMATIONS. THIS IS TELLING ME THAT SOME POWERFUL PEOPLE ARE HEAVILY MANIPULATING THIS MARKET TO THE DOWN SIDE.

If these manipulators have that kind of power, then they have the power to solve the little problem of meeting physical gold demand. As I stated on another thread some time back... I suspect that the Feds have called in the Soros's and Bill Gates or anyone else deemed to be attempting to corner the market and were probably warned and maybe even had their lives threatened and told to obey or else. They've probably also been told to back off the demand for physical metal. It's one way to solve the gold crisis or shall I say, turn it into a non-event.

-- Dick Moody (dickmoody@yahoo.com), October 23, 1999.


Dick,

I agree with you - it's not normal, and the stakes are indeed high. OTOH the BIS/EURO group are not exactly pussycats either, perhaps they have more up their sleeve than the Fed does?

You have to admit, 15 ECB's getting together to announce a 5 year moratorioum on gold sales, the WGC statements, Mundell the EURO Goldbug getting the Nobel Prize for Economics - WHAT timing :)

I don't think it's as cut and dried as you think this time Dick.

Following this Gold action will be the currency wars... and the dollar is looking horrendous at the moment.

Interesting times... :)

-- Andy (2000EOD@prodigy.net), October 23, 1999.


Is it not ironic that the sheeple still believe we live in a free country when not even our markets are free. The Dow is manipulated at least half of each trading day and gold is manipulated each moment.

Uncle Sam is grabbing at straws now. Its too late and uncle knows it. All he is concerned with now is keeping it going until Y2K and then blam (sic) it on Y2K.

-- Poor Uncle Sam (poor@uncle.sam), October 23, 1999.


It seems to me that someone was screaming that gold would hit 400 about two weeks ago?

-- (RumorsDon't@count.com), October 23, 1999.

I have a buddy at work who keeps asking me why I don't trade this stock market more considering I have such strong opinions. I told him that I believe this particular stock market is the most manipulated market in the history of the stock markets. That little bullshit move on Glass Steagle at exactly the time the market needed it for a Flu Shot was simply to good to be believed. And in fact, I don't buy it. I think these guys have lined it all out and are firing some massive silver bullets at the Y2K vampire. Unfortunately for them in this movie the vampire wins, he drains all the liquidity right out of the neck of the markets. The question is when not if. It's simple common sense, anyone managing commericial or institutional money is not gonna risk this kind of volatility times ten. And yes that vol is comming. I believe Yardeni when he tells me that his informal survey had most Y2K naysayer mutual fund and hedge fund managers sitting quietly on the sidelines during December. I believe that it will look like that wonderfully morbid painting "The Scream".

PS-I think Moody and Andy are both right. This battle is far from done. It is most certainly the greatest commercial trading battle ever waged. World economies are at stake. And that's why I'm not trading it. My trade is to put my money on the side and quitely watch the body parts fly out of the ring as the big boys duke it out.

-- Gordon (g_gecko_69@hotmail.com), October 23, 1999.



Just a quick thanks to Andy and Dick (and others) for at least a little bit of discussion on what is going on with the market and gold. I am DOW impaired and thank goodness I am getting SOME insight on this stuff. DH says thanks, too.

Blessings...Mercy

-- Mercy (prepare@now.com), October 23, 1999.


Nope. Not $500. $275 maybe, definitely not $500. The market may go down, I'm not a profit, otherwise I would be very wealthy. There just appears to be too much behind the curtain manipulation going on. I have been wrong in the past many times though.

-- jq public (jqpublic@usa.com), October 23, 1999.

Well allow me to cast a dissenting vote. You guys are way to quick to buy into some screwy conspiracy theory. All this 'Gates and Soros threatened with their life if they demand physical' nonsense is just that- Internet dribble backed by absolutely nothing. Its the oldest game in the world- some market position goes against ya so you yell- CONSPIRACY and MARKET MANIPULATION. I call it SOUR GRAPES.

With Andy and Gordy both posting here allow me to offer a case in point that involves both oil and gold. Andy makes this baseless contention that the price of gold is manipulated due to some ongoing gold for oil deal forged decades ago. I've been in the oil biz for 20 years, I think BUNK, but I keep an open mind and ask for some back up. He cites 3 books, The Prize, Oil God and Gold and another only offered by a gold dealer. I've read the Prize more than once. I order Oil, God and Gold (I notice it looks familar, I've purused it b4 but haven't thourougly read it) and his other recommendation.

Here's the bottom line- The Prize has nothing that one could even come close to construing as some ongoing oil for gold deal. Oil God and Gold has an index so I read eveything its got on Gold. Its very well researched and referenced. It sites how Aramco did forge a deal to pay for Saudi oil in 1933 (not an unusual demand back then for a Saudi King) but it ran into problems and the book very clearly details how the gold payment deal was discontinued in '46. So instead of supporting Andy's contention of ongoing gold for oil deals, IT VERY CLEARLY REFUTES IT.

So now were down to the only support for this nebulous gold for oil consiracy deal is from some gold dealer who probably wants to spin the same yarn as Andy does for $ reasons. I'll read it when it comes in but with healthy doses of skepticism because the history of the oil industry in the Arab world has been researched, disected and analysed at length. Oil is predominately paid for with dollars and has been since the 40s. There's absolutely no unbiased evidence to the contrary.

Just remember Andy's post's last weekend. Gold was trading at $318 and he was crowing about some big gold cartel press conference that was gonna moon shot the price. No announcement came and COMEX gold just closed Fri at $301.

And Andy don't even bother responding unless you have tangible evidence. Your baseless contentions and conspiracy yarns could cost people a lot of money, and I'm sure they have.

-- Downstreamer (downstream@bigfoot.com), October 23, 1999.


Dick Moody,

I have really appreciated your input on the stock and commodities markets over the past few weeks. As mentioned on another thread, you have a way of explaining things that someone like me, who has never studied or followed the market before, is able to understand a little better.

When you wrote: "NOW...THIS IS NOT NORMAL. THE CHARTS ARE SHOWING ABBERRANT AND ABNORMAL PATTERN FORMATIONS. THIS IS TELLING ME THAT SOME POWERFUL PEOPLE ARE HEAVILY MANIPULATING THIS MARKET TO THE DOWN SIDE", it really made me curious for further explanation from you. With the understanding that whatever your explanation is it would be theoretical, could you speculate about this? Who do you think these powerful people might be, and what might be their agenda? Also, and this has had me very curious when mentioned by others, how do they manipulate the market? Specifically, what are some of the mechanisms by which such a feat could be accomplished? (Other than halting trading at certain plunge points...a fact I was astonished to learn about on this forum!)

Also, I have seen mention of Glass Steagle on a few threads, including this one. What is Glass Steagle, and what occurred involving them?

Thanks!

Glass Steagle

-- (RUOK@yesiam.com), October 23, 1999.


Downstreamer, thank you. Glad someone else sees the trends of these "gold know it alls".

-- hamster (hamster@mycage.com), October 23, 1999.


Look. Use your damn heads. Gold skyrockets when TSHTF. The shit hasn't hit the fan yet. If it doesn't (extremely unlikely), gold stagnates. If it does (almost guaranteed), it goes through the roof.

It's really that simple guys. Have patience.

-- a (a@a.a), October 23, 1999.


Hey Andy, How's your DROOY doing???

-- fritz (here@everywhere.com), October 23, 1999.

If you are buying gold and silver for the sole expectation of how to make a quick buck, you are on the wrong forum. (If you are not buying physical, but rather paper stock, you are definitely on the wrong forum!)

Physical possession of small weight gold and silver coins is an excellent hedge for Y2K. Regardless of the price per ounce.

69 days.

-- Jack (jsprat@eld.~net), October 23, 1999.

>> What is Glass Steagle, and what occurred involving them? <<

Glass-Steagle is the "familiar" name of the US law passed in the 1930s that prohibits banks, insurance companies and brokerages from merging. The intent was to insulate each industry from losses in the others. Kind of like bulwarks in a ship. If all three of these industries crash at once, the financial damage would irrepairable.

These industries now badly want to merge so they can make bigger profits, and they have convinced the Republican-controlled Congress to repeal Glass-Steagle. However, the House and Senate versions of how to go about this were far apart, and the Federal Reserve had weighed in, so some heavy compromise was required to go forward. This past Friday (yesterday as I write this) the word went out that the House-Senate conference committee had reached a compromise on repeal of Glass-Steagle.

-- Brian McLaughlin (brianm@ims.com), October 23, 1999.


Thanks, Brian...YIKES! What was the Federal Reserve's position on this proposition when they weighed in? Any details on what the negotiated compromise was? I can see where institutions lagging in their remediation would want to merge with other entities who may be in better shape in order to insulate themselves from losses that may occur. But, what justification could possibly have been put forward that such mergers were no longer in danger of causing irrepairable damages in the event of a crash?

-- (RUOK@yesiam.com), October 23, 1999.


Andy,

How come you don't answer these questions? Gold had taken a big shit in the past few weeks. You were wrong and probably took a lot of suckers with you. You have to be out of your skull to listen to any of this internet advice by the wall street wannabes.

-- (Alert@ETphone.hom), October 23, 1999.


What is going to be really amusing is next week at this time when the subject in question has gone up to about $330.00

And then we are back to "See I told you so"!!

-- D.B. (dciinc@aol.com), October 23, 1999.


DB,

Isn't that what keeps this website afloat? Pollies vs doomers?? :)

-- (Alert@ETphone.home), October 23, 1999.


The next few weeks will provide the last oppportunity for buying gold coins at low prices. Buy now, or never.

-- dave (wootendave@hotmail.com), October 23, 1999.

Don't misconstrue- I am not saying one should or shouldn't hold gold and precious metals as y2k insurance (actually I think everyone should). I am saying that Andy puts forth his pro-gold agenda with alot of biased conspiracy BS that has no basis in fact. When asked to back it up he can't do any better than to cite books that he hasn't read that do just the opposite - they refute his contentions.

BS ALERT! BS ALERT! BS ALERT!

-- Downstreamer (downstream@bigfoot.com), October 23, 1999.


Ok a few answers.

Some of you folks do not have a freakin' clue :)

DROOY is down to $1.75 - I got out at $2.00. I am now completely out of paper gold, sold Harmony and Gold Fields too. They have all taken a big hit. Luckily I didn't. I believe the markets are in danger at rollover. Don't want any shares. may get back in to shares when the dust settles.

I'm with Jack. Buy and own physical gold.

I bought most of my gold at about $280 on average.

I recently ordered another large batch at $318 and am happy with the purchase. Naturally if I had waited I could have bought today at $300 or so in the current retracement. However I believe that when gold makes it's next move up it may be explosive. I don't want to miss the move so I am happy getting in at $318.

Some of you are getting very snappy here - quite juvenile some of these piss ant snivelling posts.

Do your own research, make your decision and act.

Remember, I am also coming from a position whereby I believe banks will fail and digital money will be unsafe. Hence gold is a safe haven until digital money returns. In the meantime gold will likely have skyrocketed... and I can enter-back with more digital 'money" - my options are much greater. I will also have plenty of cash and small coins available during rollover. All preps are done.

Downstreamer.

You are not playing with a full deck are you.

Read the books for background. Don't believe everything you read in books... just like don't believe everything you read on REUTERS...

I can assure you there is an oil for gold deal and has been for a long long time.

If you choose to not believe this, fine, but please do not call me a liar on this forum because you are too lazy and or stupid to have done your own research and asked questions and put two and two together.

why don't you go over to USAGOLD and spout the crapola you just gave me... they would tear you and your moronic research to threads.

this is what happens when I try to help somebody. i think you are a TROLL and am not wasting any more precious time with you.

No wonder your alleged arab "friends" wouldn't confide in you if this is the way you conduct yourself.

PS

as you know I spent nearly three years in Jeddah and have friends who work for Aramco. it is no secret - the oil for gold deal...

Do you thinks Arabs are clueless? i think you do DS.

If you were a Sheik with a finite supply of oil, would you want bits of paper or gold???

Moron.

-- Andy (AUVENGER@cs.com), October 23, 1999.


Dick,

I ran your post past I guy I greatly respect.

this is his reply.

"With all due respect to Mr. Moody, the gold market today is not an easy one to understand. Even Steve Kaplan changed his negativism of the rally to where he felt that it would go down but maybe not so badly. We have all been over the A Priori of this gold market, some not in so many words but nonetheless, we have seen the basis of the gold market's dilemna: A BIS/Euro v US$/IMF battle for reserve currency. (Battle conotes that all players are in it for their lives so may not be the best word, perhaps positioning would be better). From Mundell we can see the movement towards the Euro had its roots back in the early 70's when President Nixon took the US off the gold standard. Europe realized then that the US's (in their opinion) self- serving interests were not those of the Europeans and laid plans to protect themselves. What we are seeing today, from all appearances, is the crescendo of that planning. I don't think they purposefully 'battle' the dollar, rather I believe it is the result of the Euro's existence. The world has room for one 'reserve' curency, not two -- or perhaps it has room for two, but the market share of the one must equalize with the other, which means the $ must lower and the Euro must rise. Because the Euro is less-debt ridden than the dollar, it follows that the Euro should be valued at least twice that of the dollar if not more.

Gold enters into the picture because somehow the US$/IMF faction after 1971 didn't know how to deal with gold. It was obvious that other CB's were keeping their gold. This probably mystified a few US CB heads at the time. In the end, the Jamaica Accords set the record straight for Gold's role: the Mid-East wanted gold if it was going to provide cheap oil. Since oil is what the world used to power itself that by default left gold in the picture, but US$/IMF be damned if they would let it rise, because that would make the dollar look weak and as was seen in 1979-80' when oil did bid for gold in the open. We all saw what the price of gold did very quickly, it went up to $852/ounce.

I believe the events we see unfolding today are the direct result of other countries not wanting the US to continue to push the dollar as the reserve currency and with that all the baggage that comes with it, such as the IMF indebtedness of third world countries, lack of financial discipline, changing foreign policies, lack of committment or long-term goals, politcal expediency instead of long-term currency stability.

The on-going bubble, the use of derivatives, hedge fund irresponsibilties, foreign currency raids by large dollar factions, and US money managers forgetting the role of gold in world financial affairs (as a reserve asset and not a money-earning asset) upset the rest of the world. We are seeing the backlash to some of this irresponsbile behavior. I believe it is that simple.

So to say that Gold is set up for a big bear market contradicts the A Priori spoken of above. I believe the world beyond the US has spoken and said that gold is important to the world and don't mess with it. Should a big push come along to drive gold lower as Mr. Moody infers then I would see the following happening, which would likely reverse the push downwards rapidly:

-- Gold Cartel would be formed (and may already be in the works). -- Oil would bid for gold directly again. -- Some countries would openly sell dollars. -- Some large stock faction unfriendly to the US might prick the stock market bubble in an unfriendly manner. -- OPEC et al would lower production quotas more. -- Who knows what else?

As you can see the world coconstitutes itself in that it is one big family in which all members deny their membership. When one member gets out of line (notwithstanding the power or financial prowess of that member) the rest of the world reacts in a way to bring that party back in the fold. This is what is happening and gold plays a central role because it is believed by most of the family to be the glue that holds all currencies together and because those who have the oil believe that, live by it, and will protect their gold because when their oil is gone, they have to have something to show for it.

When you view the world from the above perspective, you now understand the Ashanti gold stories, you see why Kuwait might put 79 tons in foreign account hands, why Mr. Armstrong bad talked gold so much, and why the US$/IMF faction is delaying the chess moves of the BIS/Euro faction. So Mr. Moody sees but one piece of the puzzle, doesn't have the big picture, and even though might get a short-term down trend correct will be left holding an empty hand as world events slip through his hand like water. IMO."



-- Andy (AUVENGER@cs.com), October 23, 1999.


Anyone can tell me where I can see the daily chart and trend of gold and silver? Thanks



-- Jenny (Jenl@aaa.com), October 24, 1999.

Jenny,

check out www.mrci.com

www.gold-eagle.com

www.kitco.com

-- Andy (AUVENGER@cs.com), October 24, 1999.


Jenny,

http://www.futuresource.com

But this is a site that offers only a free charting service for 30 days, but it's the best free stuff I've seen out there. After 30 days you can subscribe for something like $30.00 a month.

Here's another site with charts. It's always free but the charts are not nearly as a long or as detailed, but it comes with a daily analysis of the technical oscillators. Probably good for a newbie.

http://tfc-charts.w2d.com/chart/GD

-- Dick Moody (dickmoody@yahoo.com), October 24, 1999.


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