Gold Stock Bulls Gore The Bears

December 11, 2018

Where Are The Populist Government Leaders Who Are Cutting Their Outrageous Government Debts?

The answer, unfortunately, is that they do not exist.

Citizens riot in France over insane fuel taxes, central bankers resign in India, markets crash in America, and England’s citizens watch their Brexit turn into an overpriced wet noodle.

None of this fazes the world’s populist leaders. They believe they alone can fix what debt broke… with more debt!

In the middle of all the mayhem and madness, the uncrowned queen of the world, gold bullion, sits cooler than a cucumber. Gold is showcasing a nice steady uptrend on this medium-term price chart.

Heavyweight analysts at JP Morgan, Goldman, Wells Fargo, and other big banks are bullish on gold now, but many amateur analysts and investors are worried (with some sounding outright terrified) that gold is going lower.

This is a classic wall of worry rally, and I expect the upside price action to accelerate in January and February.

There’s also a real possibility that Trump piles on more destructive tariffs by March. If that happens, it would occur just as Chinese New Year gold buying really accelerates.

In that scenario, gold could surge towards the key $1400 area and the US stock market would likely crash like it did in 1929.

Investors must keep their eye on the big picture, which is all about the growth of the Chindian love trade and the rise of inflation, especially in the West.

A new pillar of gold bullion demand could also emerge now that India’s populist leader (Modi) has essentially taken control of the nation’s central bank. A fresh survey shows that 90% of Indian households see substantially higher inflation coming in 2019. That survey was done before the nation’s top central banker resigned yesterday!

The world’s populist leaders want interest rates to stop rising so their governments can borrow even more money and waste it on silly “people helper” programs.

Some of the populist leaders want to buy more bombs, some want more welfare programs, but what they all have in common is they want to spend more, and more, and more! This is highly inflationary.

While many amateur gold analysts have talked about their fear of lower prices, I’ve urged investors to focus on the epic upside breakout taking place on the world’s most important gold mining company. That company is: Barrick.

Junior gold and silver stock enthusiasts can expect to see their stocks begin to follow the Barrick leader. It’s already happening with many of the CDNX-listed stocks, and this morning’s pre-market “super surge” in Barrick’s price is going to start the next major wave higher for most of the junior miners.

What seals the deal? Answer: A weekly close above $14 for Barrick. I expect it to happen this week and investors who waste time reading the fears of the gold bears risk missing out on years of upside price action. The bottom line:

This is not the start of a gold bull market. It’s the start of a bull era that will last a hundred years.

I’ve predicted three US rate hikes for 2019. Goldman was predicting four, but yesterday their chief economist Jay Hatzius reduced his forecast to three.

We’re on the same page now, with both of us predicting three hikes, a surprising rise in US inflation, and GDP growth that fades under the 2% marker by the second half of 2019.

Ray Dalio is head of the world’s largest hedge fund (Bridgewater). Ray predicts an “inflationary depression” will envelop America within about two years. I think it takes three to four years, but given the danger, does the time frame really matter? The timing of a hurricane doesn’t change the fact that people need to get out of its way.

Just as most big bank analysts are positive about gold now, they have increasingly negative forecasts for the US dollar.

The policies of the world’s “spendaholic” populist leaders are extremely inflationary. The bank analysts know that’s bad news for dollar bugs and great news for gold stock investors.

This is the magnificent GDX price chart. My short-term www.guswinger.com swing trading service has caught all the key swings in the GDX base formation, reducing boredom while making investors richer! I focus on NUGT and DUST for the short term moves and unleveraged GDX for the home run plays!

We booked solid profits yesterday as GDX edged towards the important $20.50 price zone. After a brief pitstop at this minor resistance zone, the GDX bull is poised to drive its golden horns into the bears… and begin a magnificent charge up to $23.50!

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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

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Stewart Thomson is president of Graceland Investment Management (Cayman) Ltd. Stewart was a very good English literature student, which helped him develop a unique way of communicating his investment ideas.  He developed the “PGEN”, which is a unique capital allocation program. It is designed to allow investors of any size to mimic the action of the banks.  Stewart owns GU Trader, which is a unique gold futures/ETF trading service, which closes out all trades by 5pm each day. High net worth individuals around the world follow Stewart on a daily basis.  Website: www.gracelandupdates.com.

A gold nugget can be worth three to four times the value of the gold it contains because they are so rare.