watermock
01-14-2009, 09:32 PM
Where’s Gold Headed Next?
Phase 3 is Coming-- The Hottest Years of a Bull Market
Gold continues an impressive Bull Market, reaching the all-important correction period before phase three takes us into the most profitable years still ahead. Rising from a $258 low in 1999, Gold almost quadrupled in value by early March and hit an historic high of $1,011 an ounce. But, we feel the Bull run is far from over! In fact, the eight-year length and the ongoing correction are indications to us that the foundation of this Gold Bull Market remains strong, despite the recent volatility. While, at the moment, almost every investment sector has suffered huge losses, we remain convinced that Gold will be the ultimate survivor.
If you watch day to day Gold prices, you might be surprised to learn that the Gold price correction is happening primarily in the “paper futures” market. In the physical Gold market, the price is significantly higher as a 1 oz. American Eagle Gold Coin trades for $100 dollars over the futures price for Gold. Never before have we seen investors fleeing the risky Gold futures market and willing to pay high premiums for the privilege of owning physical Gold Coins they might need in an emergency.
Investors Rushing Into Safe Haven Gold
Demand for physical Gold continues at a record pace. In October of 2008, we sold three times more physical Gold Coins, Silver Dollars, and U.S. Rare Coins as in any month in our history since 1989! And November Gold sales continued on a record pace. This month’s Austin Report will highlight where we think we are in this Bull Market and try to forecast what’s next. We’ll compare and contrast today’s Gold Bull Market against the 1968 to 1980 Bull Market. We’ll see where Gold is headed next… up, down, or off the chart!
Topline Gold Research
Thanks to the extensive research provided to us by Topline Investment Graphics, we’ve traced the two Bull Markets into a unique graph to help us understand where we are in the current Gold Bull Market, how long it may last, and how high Gold may go. Here’s what we feel the chart is telling us:
Length of the Gold Bull Market
• Total length of the 1970s Gold Bull Market was between 10 and 13 years.
• Today’s Bull Market has passed the 8 year mark from the $258 low of July 1999.
Conclusion: We still have two to five years before Gold reaches a phase three high.
Strength
• About 6 years into the 70s Bull Market, Gold was priced 5.5 times higher than at the start.
• In 2008, the price of Gold peaked at only 3.91 times higher than the low.
Conclusion: The $1,011 high was an intermediate high; the best profits are yet to come.
Re-Enforcing Correction
• In the middle of the Bull Market of the 70s, the price of Gold corrected by 47%.
• At that time, many people felt the Gold Bull Market was over—but they were very wrong.
• In the midst of today’s Bull Market, Gold has also corrected from $1,011 to as low as $712.50.
Conclusion: The present correction is an indication that the best phase of the current Gold Bull Market is ahead.
Post Correction Phase
• After the harsh 1976 price correction, Gold took off again and rose more than 721%.
• After the current price correction is over, we believe Gold will rise quickly, without warning.
Conclusion: From the recent correction low of $712.50, we may see Gold top $5,137.
Financial Panic
Clearly, past performance is no guarantee of future value. In fact, we can only paint this Gold Bull Market with broad strokes as there are many, many differences between the 1970s and today. For many reasons, we should expect the Sub-Prime Mortgage Crisis to have triggered a worldwide recession of historic proportions now in the very early stages. The U.S. has still not officially recognized we are in a recession.
Wealth has simply deflated away, making the coming recession a multi-decade financial slowdown. Standard & Poor's reports 52 leading global markets lost $5.79 Trillion Dollars in October after losing $4 Trillion in September for a total of $9.79 Trillion Dollars. More than 46% of the world Stock Market capitalization evaporated in 2008. To resolve the world's financial crisis and Stock Market crash, Treasury Secretary Paulson's $850 Billion Dollar bailout is like using a teacup to bailout the Titanic.
Time and again we hear—“This is the worst economic crisis since the Great Depression.” With world Stock Markets in a total meltdown mode, we believe it! Not since the Great Depression has the U.S. Government been forced to seize, nationalize, or bailout Wall Street Bankers, brokerage firms, and the world’s largest insurance company A.I.G. Absolutely nothing on that scale happened in the 1970s. We mention this because we are convinced that the Stock Market crash is different this time—Stocks may not come back to recent highs for 10 to 20 years or longer. We recommend investors prepare for an extremely long and severe recession.
Your investments today should be extremely defensive with the #1 goal of “Wealth Preservation.”
As evidence of the severity of today’s financial crisis, GM, Ford, and Chrysler were just pushed out of line at the Government bailout window because A.I.G.’s $150 Billion dollar bailout will be paid for by U.S. taxpayers. The financial world today has been turned upside down, leaving all of us to reconsider if everything we’ve believed about investing has been wrong, dead wrong. Certainly the Stock Market’s mantra of “Buy and Hold” is not working. Even your broker's or investment advisor's best plans to “balance and diversify” your portfolio with only stocks and bonds has most likely failed during the current financial meltdown.
Why Gold is Not Trading at $2,000 Today
In light of the U.S. Stock Markets continuing in a free fall as investors have lost, 35%, 40%, and some 50% of their life savings, all of us wonder if any investments can survive. Steven Forbes of Forbes magazine made an astute comment this week when he told CNBC,
“The Federal Reserve has actually tightened up on liquidity… which is why things like Gold,
in this crazy environment, should be shooting up to $2,000 an ounce.”
Gold Remains Up 36% Despite the Volatility
No investment sector has been safe as stocks, bonds, oil, commodities, and even precious metals have all had a rough year. None will be completely safe in the coming months. But, when we compare the price of Gold to the DOW Industrials over the past 18 months, Gold has gained a net 36% while the DOW is down 35%. If you purchased Gold expecting precious metals to be completely immune from the financial meltdown, you’re probably wondering—“Where is Gold headed next?”
Gold Hold Gains While U.S. Stocks Fall 35%
Believe us when we say, we too find it difficult to believe that Gold has been dragged screaming and hollering into the Stock Market meltdown. But it is a reality that even Gold prices are down right now. After all, we’ve always been told that Gold would protect us from a crisis and be a safe haven against crazy Stock Market crashes like we are seeing unfold before our eyes. Gold is supposed to provide wealth preservation during any crisis.
If Gold is up 36% over the past 18 months and Stocks are down 35% that leaves Gold with a 71% better performance gain. And most importantly, at a time when just about every imaginable investment is taking a beating, Gold is not only holding on to its value by its fingernails, but is also beating the current U.S. inflation rate of 5.58%.
Why Isn’t Gold $2,000 an Ounce?
One of the villains in the current meltdown is Hedge Funds. These massive funds are highly leveraged and made huge bets in the markets. While profitable in the past, the markets went against them and Hedge Funds have had forced margin calls and waves of investor redemptions. Many went bust and lost all their investors' money. As a result, Hedge Funds are being forced to liquidate everything– even Stocks of great companies, Gold Stocks, Gold ETFs, and Bonds are being dumped into the market at any price.
Result: Gold futures have not been spared from the selloffs. However, the physical Gold Market is much stronger than futures prices would indicate. The reality is that demand for physical market Gold Coins and Gold Bars has been exploding. Gold dealers have no Gold in their vaults anywhere! We are all sold out completely and waiting for World Mints to strike Gold Coins to fill backorders. As we write this report, the price for real, hold in your hand, physical Gold Coins are selling for $100 an ounce over the “paper” bid price for Gold.
Gold Futures Disconnect from Physical Gold
This is the most remarkable disconnect we’ve ever seen in the Gold Markets. Don’t let the “paper” prices fool you– Gold is hot! In fact, in the month of October, we sold three times as many Gold Coins, Silver Dollars, and U.S. Rare Coins as we did in March when Gold was at $1,011. Investors are literally waiting in lines on the telephone to speak to our Gold Specialists. Local Austin clients are walking in, writing out checks for Gold—now get this – and are eager and willing to wait 4 to 6 weeks. Amazingly, despite the long waits, our clients have not complained much and are just thankful they can still buy Gold Coins at prices well below the recent $1,011 high.
Have Patience Gold Believers
In a world in which the value of every single investment you own is being called into question, we recommend you consider carefully how Gold performed during the 1970’s financial crisis. Back then, Gold had a tough 20 month period in which the price corrected. Back then, after six tough years, many people believed that high oil prices, inflation, recession, and the economic mess would end quickly, but it did not. Double-dip, back-to-back recessions in the 70s proved to be the real economic killer. This is exactly the kind of craziness we expect to continue for the next five to ten years.
In light of the wild volatility on Wall Street, and more to come before the end of the year, we urge our readers to take advantage of the current price correction in Gold. We feel the day will come, before the end of the year, when we see another $50 pop in the price of Gold. The return to $1,000 Gold is inevitable, in our opinion.
The Case for Gold Has Not Changed
• Protection - Overwhelmingly, Gold has protected investors during the Sub-Prime Mortgage Crisis.
• Preservation - Gold has provided wealth preservation in a way that far exceeded the Stock Market.
• Performance – Since 2000, Gold has far outperformed Treasury Bonds or keeping cash in the bank. Gold is up
210% despite the recent correction.
• Privacy – Gold offers you one of the last opportunities to invest in an anti-government, anti-Dollar, anti-bank, and
anti-socialistic monetary system.
In many ways, Gold has been far safer than money in the bank—and far more profitable! While money in the bank under FDIC limits has been insured, sort of, the FDIC holds a mere $45 Billion to cover $4.5 Trillion Dollars of bank deposits. In 2008, 25 banks failed, and including Washington Mutual, they've eaten up an estimated $322 Billion of the FDIC insurance. Before this crash is over, the FDIC is likely to need a bailout. By contrast, Gold is one investment that never needs a bailout!
http://austincoins.com/ar-GoldHeaded.htm
Phase 3 is Coming-- The Hottest Years of a Bull Market
Gold continues an impressive Bull Market, reaching the all-important correction period before phase three takes us into the most profitable years still ahead. Rising from a $258 low in 1999, Gold almost quadrupled in value by early March and hit an historic high of $1,011 an ounce. But, we feel the Bull run is far from over! In fact, the eight-year length and the ongoing correction are indications to us that the foundation of this Gold Bull Market remains strong, despite the recent volatility. While, at the moment, almost every investment sector has suffered huge losses, we remain convinced that Gold will be the ultimate survivor.
If you watch day to day Gold prices, you might be surprised to learn that the Gold price correction is happening primarily in the “paper futures” market. In the physical Gold market, the price is significantly higher as a 1 oz. American Eagle Gold Coin trades for $100 dollars over the futures price for Gold. Never before have we seen investors fleeing the risky Gold futures market and willing to pay high premiums for the privilege of owning physical Gold Coins they might need in an emergency.
Investors Rushing Into Safe Haven Gold
Demand for physical Gold continues at a record pace. In October of 2008, we sold three times more physical Gold Coins, Silver Dollars, and U.S. Rare Coins as in any month in our history since 1989! And November Gold sales continued on a record pace. This month’s Austin Report will highlight where we think we are in this Bull Market and try to forecast what’s next. We’ll compare and contrast today’s Gold Bull Market against the 1968 to 1980 Bull Market. We’ll see where Gold is headed next… up, down, or off the chart!
Topline Gold Research
Thanks to the extensive research provided to us by Topline Investment Graphics, we’ve traced the two Bull Markets into a unique graph to help us understand where we are in the current Gold Bull Market, how long it may last, and how high Gold may go. Here’s what we feel the chart is telling us:
Length of the Gold Bull Market
• Total length of the 1970s Gold Bull Market was between 10 and 13 years.
• Today’s Bull Market has passed the 8 year mark from the $258 low of July 1999.
Conclusion: We still have two to five years before Gold reaches a phase three high.
Strength
• About 6 years into the 70s Bull Market, Gold was priced 5.5 times higher than at the start.
• In 2008, the price of Gold peaked at only 3.91 times higher than the low.
Conclusion: The $1,011 high was an intermediate high; the best profits are yet to come.
Re-Enforcing Correction
• In the middle of the Bull Market of the 70s, the price of Gold corrected by 47%.
• At that time, many people felt the Gold Bull Market was over—but they were very wrong.
• In the midst of today’s Bull Market, Gold has also corrected from $1,011 to as low as $712.50.
Conclusion: The present correction is an indication that the best phase of the current Gold Bull Market is ahead.
Post Correction Phase
• After the harsh 1976 price correction, Gold took off again and rose more than 721%.
• After the current price correction is over, we believe Gold will rise quickly, without warning.
Conclusion: From the recent correction low of $712.50, we may see Gold top $5,137.
Financial Panic
Clearly, past performance is no guarantee of future value. In fact, we can only paint this Gold Bull Market with broad strokes as there are many, many differences between the 1970s and today. For many reasons, we should expect the Sub-Prime Mortgage Crisis to have triggered a worldwide recession of historic proportions now in the very early stages. The U.S. has still not officially recognized we are in a recession.
Wealth has simply deflated away, making the coming recession a multi-decade financial slowdown. Standard & Poor's reports 52 leading global markets lost $5.79 Trillion Dollars in October after losing $4 Trillion in September for a total of $9.79 Trillion Dollars. More than 46% of the world Stock Market capitalization evaporated in 2008. To resolve the world's financial crisis and Stock Market crash, Treasury Secretary Paulson's $850 Billion Dollar bailout is like using a teacup to bailout the Titanic.
Time and again we hear—“This is the worst economic crisis since the Great Depression.” With world Stock Markets in a total meltdown mode, we believe it! Not since the Great Depression has the U.S. Government been forced to seize, nationalize, or bailout Wall Street Bankers, brokerage firms, and the world’s largest insurance company A.I.G. Absolutely nothing on that scale happened in the 1970s. We mention this because we are convinced that the Stock Market crash is different this time—Stocks may not come back to recent highs for 10 to 20 years or longer. We recommend investors prepare for an extremely long and severe recession.
Your investments today should be extremely defensive with the #1 goal of “Wealth Preservation.”
As evidence of the severity of today’s financial crisis, GM, Ford, and Chrysler were just pushed out of line at the Government bailout window because A.I.G.’s $150 Billion dollar bailout will be paid for by U.S. taxpayers. The financial world today has been turned upside down, leaving all of us to reconsider if everything we’ve believed about investing has been wrong, dead wrong. Certainly the Stock Market’s mantra of “Buy and Hold” is not working. Even your broker's or investment advisor's best plans to “balance and diversify” your portfolio with only stocks and bonds has most likely failed during the current financial meltdown.
Why Gold is Not Trading at $2,000 Today
In light of the U.S. Stock Markets continuing in a free fall as investors have lost, 35%, 40%, and some 50% of their life savings, all of us wonder if any investments can survive. Steven Forbes of Forbes magazine made an astute comment this week when he told CNBC,
“The Federal Reserve has actually tightened up on liquidity… which is why things like Gold,
in this crazy environment, should be shooting up to $2,000 an ounce.”
Gold Remains Up 36% Despite the Volatility
No investment sector has been safe as stocks, bonds, oil, commodities, and even precious metals have all had a rough year. None will be completely safe in the coming months. But, when we compare the price of Gold to the DOW Industrials over the past 18 months, Gold has gained a net 36% while the DOW is down 35%. If you purchased Gold expecting precious metals to be completely immune from the financial meltdown, you’re probably wondering—“Where is Gold headed next?”
Gold Hold Gains While U.S. Stocks Fall 35%
Believe us when we say, we too find it difficult to believe that Gold has been dragged screaming and hollering into the Stock Market meltdown. But it is a reality that even Gold prices are down right now. After all, we’ve always been told that Gold would protect us from a crisis and be a safe haven against crazy Stock Market crashes like we are seeing unfold before our eyes. Gold is supposed to provide wealth preservation during any crisis.
If Gold is up 36% over the past 18 months and Stocks are down 35% that leaves Gold with a 71% better performance gain. And most importantly, at a time when just about every imaginable investment is taking a beating, Gold is not only holding on to its value by its fingernails, but is also beating the current U.S. inflation rate of 5.58%.
Why Isn’t Gold $2,000 an Ounce?
One of the villains in the current meltdown is Hedge Funds. These massive funds are highly leveraged and made huge bets in the markets. While profitable in the past, the markets went against them and Hedge Funds have had forced margin calls and waves of investor redemptions. Many went bust and lost all their investors' money. As a result, Hedge Funds are being forced to liquidate everything– even Stocks of great companies, Gold Stocks, Gold ETFs, and Bonds are being dumped into the market at any price.
Result: Gold futures have not been spared from the selloffs. However, the physical Gold Market is much stronger than futures prices would indicate. The reality is that demand for physical market Gold Coins and Gold Bars has been exploding. Gold dealers have no Gold in their vaults anywhere! We are all sold out completely and waiting for World Mints to strike Gold Coins to fill backorders. As we write this report, the price for real, hold in your hand, physical Gold Coins are selling for $100 an ounce over the “paper” bid price for Gold.
Gold Futures Disconnect from Physical Gold
This is the most remarkable disconnect we’ve ever seen in the Gold Markets. Don’t let the “paper” prices fool you– Gold is hot! In fact, in the month of October, we sold three times as many Gold Coins, Silver Dollars, and U.S. Rare Coins as we did in March when Gold was at $1,011. Investors are literally waiting in lines on the telephone to speak to our Gold Specialists. Local Austin clients are walking in, writing out checks for Gold—now get this – and are eager and willing to wait 4 to 6 weeks. Amazingly, despite the long waits, our clients have not complained much and are just thankful they can still buy Gold Coins at prices well below the recent $1,011 high.
Have Patience Gold Believers
In a world in which the value of every single investment you own is being called into question, we recommend you consider carefully how Gold performed during the 1970’s financial crisis. Back then, Gold had a tough 20 month period in which the price corrected. Back then, after six tough years, many people believed that high oil prices, inflation, recession, and the economic mess would end quickly, but it did not. Double-dip, back-to-back recessions in the 70s proved to be the real economic killer. This is exactly the kind of craziness we expect to continue for the next five to ten years.
In light of the wild volatility on Wall Street, and more to come before the end of the year, we urge our readers to take advantage of the current price correction in Gold. We feel the day will come, before the end of the year, when we see another $50 pop in the price of Gold. The return to $1,000 Gold is inevitable, in our opinion.
The Case for Gold Has Not Changed
• Protection - Overwhelmingly, Gold has protected investors during the Sub-Prime Mortgage Crisis.
• Preservation - Gold has provided wealth preservation in a way that far exceeded the Stock Market.
• Performance – Since 2000, Gold has far outperformed Treasury Bonds or keeping cash in the bank. Gold is up
210% despite the recent correction.
• Privacy – Gold offers you one of the last opportunities to invest in an anti-government, anti-Dollar, anti-bank, and
anti-socialistic monetary system.
In many ways, Gold has been far safer than money in the bank—and far more profitable! While money in the bank under FDIC limits has been insured, sort of, the FDIC holds a mere $45 Billion to cover $4.5 Trillion Dollars of bank deposits. In 2008, 25 banks failed, and including Washington Mutual, they've eaten up an estimated $322 Billion of the FDIC insurance. Before this crash is over, the FDIC is likely to need a bailout. By contrast, Gold is one investment that never needs a bailout!
http://austincoins.com/ar-GoldHeaded.htm