Gold Forecasting Via The Magic Of The Golden Cross (Part 2)

March 31, 2014

YTD Precious Metal Mutual Funds leave Wall Street stocks dead in the water

Golden Crosses in a basket of 374 precious metal equities

The 4 largest gold & silver equity mutual funds in the USA enjoyed soaring performance Year-To-Date. Here are the percent gains of each vs the S&P500 Stock Index:

- Tocqueville Gold Fund (TGLDX) soared +18.05% vs S&P500 up a mere 0.50%.  http://tinyurl.com/mv4wd2k

- US Global Precious Metals Fund (USERX) soared +13.67% vs S&P500 up a mere 0.50%.
http://tinyurl.com/mflusy7

- Fidelity Select Gold Fund (FSAGX) soared +16.59% vs S&P500 up less than 0.50%.
http://tinyurl.com/mkz24ec

- USAA Precious Metals Fund (USAGX) soared +16.41% vs S&P500 up a mere 0.50%.
http://tinyurl.com/ldxgs59

YTD Precious Metal Mutual Funds have produced on average more than 32 TIMES more return than the S&P500 Index YTD.  And with any doubt that is SUBSTANTIAL to say the least!!!

Like the AD man says on TV....WHERE IS YOUR MONEY?!

Amazingly, they have all created Golden Crosses recently - see charts showing only the 50 dma crossing above the 200 dma:

TGLDX - http://tinyurl.com/qb8gh77

USERX - http://tinyurl.com/qys4wej

FSAGX - http://tinyurl.com/olyqlm9

USAGX - http://tinyurl.com/p4jq5tg

Without any doubt the recent formation of Golden Crosses is heralding the beginning of a NEW BULL MARKET IN PRECIOUS METAL ASSETS. Frankly, the mounting evidence of corroborating facts flashing Buy Signals for precious metal equities is overwhelming. Consider the following:

- Four of the world's largest Precious Metal Funds have just created Golden Crosses.
- Today's Golden Cross level has formed a bullish Double Bottom with 2009.
- The total assets under management of these four Precious Metals Mutual Funds is $3.4 BILLION
- The total number of Precious Metals companies in the four funds is 374.

And last but not least is the imminent Golden Cross generated on the HUI/Gold Ratio (which has formed a bullish Double bottom to boot).

http://tinyurl.com/kyp4mjy

Likewise the GDM/Gold Ratio has an imminent forming Golden Cross:

http://tinyurl.com/lzjalx3

When the general investing public becomes aware of the above bull market statistics, there will inevitably be a stampede into Precious Metals Mutual Funds by individual investors, Pension Programs, Insurance Companies and Bank Trust Departments.

All the above strongly suggests the entire spectrum of precious metal investments will forge new all-time record highs in the not too distant future…leaving sad Wall Street investors dead in the water.

Forecast for the Gold Bugs Index (HUI):

Based upon the corroborating evidence cited above, HUI may repeat its spectacular January 2001-May 2002 performance, when the Gold Bugs Index soared +244% in only 17 months. Ergo, the HUI Index may top 485 by October 2015.

http://tinyurl.com/mg2re38   

Looking at the above chart, two bullish factors jump out immediately:

  • Gold stocks have just now started to move up from a similar level in 2008.
  • Gold stocks remain severely undervalued compared to the gold price. A simple reversion to the mean implies a tremendous upside move.

As was mentioned in Part 1 of “Gold Forecasting Via The Magic Of The Golden Cross,” there are two related factors which may well be the spark and fuel to catapult precious metal values further into orbit than the above stated forecast:

-An impending BEAR MARKET in US stocks, and

-The China Factor and all that it portends for higher gold and silver prices. China continues to consume record amounts of gold and officially overtook India as the world’s largest buyer of gold in 2013.

After reviewing many of the various gold forecasts and predictions on our Gold Forecasts page, it is clear that sentiment around 2014 gold prices predictions are all over the map.

DISCLOSURE:  The analyst of the above editorial is already 100% invested in precious metal equities.

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Founder of Gold-Eagle in January 1997.  Vronsky has over 42 years’ experience in the international investment world, having cut his financial teeth in Wall Street as a financial analyst with White Weld. Vronsky speaks three languages with indifference: English, Spanish and Brazilian Portuguese.  His education includes a degree in Petroleum Engineering from the University of Oklahoma, a Liberal Arts degree from Hartnell College and a MBA in International Business Administration from UCLA – qualifying as Phi Beta Kappa and Tau Beta Pi for high scholastic achievements.  Vronsky believes gold and silver will soon be recognized as legal tender in all 50 US states…and many countries worldwide.  You may reach I. M Vronsky at: vronsky@gold-eagle.com and/or vronsky@bellsouth.net

The volume of all the gold ever mined can occupy a cube 63 feet on each side.

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