On the heels of gold close to breaking its all-time high and silver surging strongly, the gold and silver markets are setting up for violent moves higher.
Gold Bull Just Getting Started
July 25 (King World News) – Top Citi analyst Tom Fitzpatrick: The other 2 major bull markets in Gold were: 1976-1980 (when in multiplied in value by about 8.5 times as we came out of the worst recession post War only to see inflation surge as growth returned) and 2001-2011 when it multiplied in value by about 7.5 times as we saw the NASDAQ bubble burst, 911, a housing bubble, the Great Financial crisis and huge monetary and fiscal stimulus.
This Crisis And $4,000-$8,000 Gold
This time we have a crisis, the largest fiscal and monetary stimulus in the history of mankind and a fed that has told you it will have no intention of “reining things in” as the economy improves, even if inflation starts to rise.
As a consequence we see no reason why this bull market cannot be as strong as those prior 2 averaging a multiple of 8 times over an average of 7 years. Translating that to the $1,046 low in 2015 would come up with a number north of $8,000 possibly in as little as the next 2-3 years. Even if that sounds aggressive, a move similar to what we saw in 2009-2011 would suggest close to $4,000. Closer to home a break to new highs would suggest an extended move initially towards $2,400 (trend line off the 1980 and 2011 highs).
Silver: Back To $50
Silver has moved above the $21.14 level twice in history (1979 and 2010) and failed there twice (2008 and 2016). In both instances that this range gave way, once it got a weekly close above this range, it never looked back. After the 1979 break it reached a peak of $49.45 within 2 months. After the 2010 break it reached a peak of $49.80 within 7 months. While that seems like a big move (and it is) let us not forget that Silver has never even sustained a move over $50 in history despite getting to that area for the first time over 30 years ago while Gold is substantially above the 1980 peak of $873.
Gold/Silver Ratio Headed Even Lower
The Gold Silver ratio has hit and so far held the 55 month moving average at 81.03.It has not had a monthly close below this average in over 7 years and there is a wide gap to the 200 month MA and trend line support in the mid 60’s. A monthly close below the 55 month MA, if seen, would suggest continued Silver outperformance in the months ahead.
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Pierre Lassonde – Upside In Gold Is Unlimited, Going Far Higher Than People Imagine
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