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Tuesday, April 2, 2019

Confirm 🔴Gold 2000$ Forecast REAFFIRMED In 24th April 2019?Financial Reset Wipeout!

S&P Is Key To Coming Gold Rally

“It is only a matter of time now, and that time is in months, not years.” Prior to the FOMC meeting last week, I forecast that the Fed would be dovish on both interest rates and the balance sheet reduction program, but this would mean that all of the dovish “speak” since their verbal 180 in January that contributed to the rally in stocks is now priced in. I believe that is now the case and there is little more the Fed can say that will push stocks higher.
Other factors in the stock market rally, such as China’s gargantuan stimulus in January that equated to 5% of its annual GDP in 1 month, has been dramatically reduced. Stock buybacks, which reached a record level in Q1, are now fast approaching their buyback blackout period ahead of corporate earnings for Q1.
On top of that, global liquidity, the primary driver of stock prices since 2009, is now falling again. Any trade deal between the U.S. and China has now been pushed off until May “at the earliest”, even though I don’t think any substantive deal will be agreed upon. Taken together, this could mean that stocks are in for a very rough ride in the next month or so.
Since early 2018, my primary scenario for a historic low in Gold has been a Fed reversal in policy to rate cuts and QE due to a stock market crash. We got the first leg of that crash in Q4 followed by the relief rally in Q1, the second leg, and now we may be about to drop in the third and final leg to lower lows in the S&P around 2100 to 2200.
Such a crash would provide the Fed the excuse to not only cut interest rates and revert to QE thereafter, but also unleash monetary insanity-on-steroids to boost risk assets and kick the can a little further down the road one last time. The Fed has already stated that it is considering various tools in addition to rates and QE that it rejected previously. Negative interest rates, a cap on bond yields, and buying corporate debt and equities are among them. This is on top of buying massive amounts of maturing and new treasury bonds, as budget deficits and the national debt soar at a time when foreign banks have basically stopped buying. Just imagine how much they will need to print to do all of this and what it will mean for the dollar. Under those circumstances, Gold can only go higher, in my opinion. A lot higher.
In almost every major crisis, bonds lead equities. Yields fall first, then stocks follow. In November, 10-year treasury yields peaked at 3.24% and are now almost a full percentage point lower at 2.39%. If credit is leading again this time around, then we should expect stocks to fall sharply soon, perhaps as early as next week. In such a scenario, expect bond yields to fall further.
As I wrote last week, Gold still maintains a near perfect inverse relationship with real interest rates, which have tumbled in recent weeks. This has been due to the significant drop in bond yields. If this continues as stocks fall, then Gold is going higher.
TIPS are the inverse of real yields)
The only caveat to that scenario is if the Bullion Banks do what they did between March and October 2008 and try to squeeze out all of the weak longs before the massive rally in Gold to follow. But even then, it just delayed the inevitable rally in Gold which began in October and led to a near 3x rise to 1900.
I have said “No QE, no bottom” in stocks. I believe the Fed’s return to QE is inevitable, and when that happens, Gold will soar. It is only a matter of time now, and that time is in months, not years.
Until then, the range in Gold remains 1280-1350. A break of 1350 almost guarantees a test of 1377, whereas a break of 1280 opens up a move down to the 200-day moving average at 1251 and the 200-week moving average at 1241 below there.
As I said last week: If the Banks do try to force everyone out before the rally ahead, it will likely create the last bargain buying opportunity in metals, perhaps ever. “BTFD”.

John Rubino: Fascinating News From The Gold Mining Sector And The Junior Miners

John says things are bubbling under the surface, and a handful of emerging players put up good numbers and make their investors rich. Here’s more…It’s been a boring few years for gold miners in general and junior gold miners in particular. The metal has been in a trading range, capital has been relatively scarce, and major deals even scarcer.
But under the surface things are bubbling, as a handful of emerging players put up good numbers and make their investors rich, while a somewhat bigger handful of explorers find notable deposits. The result is a lot of wheeling, dealing and empire building that gets little press but is fascinating for the tiny subset of investors who care about this sector.
One event that might end up being notable is Eric Sprott’s decision to leave the board of Kirkland Lake Gold:

Kirkland Lake Gold Announces Retirement of Non-Executive Chairman

Kirkland Lake Gold announced today that Eric Sprott, Chairman of the Company’s Board of Directors will retire as Chairman and a member of the Board following the Company’s 2019 Annual General Meeting of Shareholders on May 7, 2019. Mr Sprott has served as the Chairman of the Board since November 2016.
Eric Sprott, Chairman of the Board said, “During the past five years, we have succeeded in creating a truly unique gold company which continues to have significant upside potential. While I have decided that now is the right time for my retirement, I fully expect to remain a very interested and engaged shareholder of the Company.”
Now, this might be nothing. Eric Sprott is, like so many of us, no longer young, and he’s got a lot of irons in the fire. So maybe he’s just lightening his load a bit. But Kirkland is one of the gold mining world’s recent success stories…
… so why would a player like Sprott leave its board just as things are getting good? Perhaps, speculates a poster on another miner’s online forum, because Sprott has found an even better horse to ride – Novo Resources – in which both he and Kirkland are major investors:
I have long viewed Eric Sprott’s simultaneous Kirkland Lake and Novo Resources [NVO] board memberships as so inherently conflicting for him such that at some point he would naturally choose one over the other. Logically, the point in time by which his choice would need to be made was at such time as it might become clear in ES’s mind that [Novo CEO] QH and his team had in all likelihood succeeded in establishing the validity and economic viability of their exploration model, but before public disclosures confirmed it. And certainly before investment opportunities that might pit the interests of miner Kirkland against those of prospective miner Novo might arise. (For example, as presented by a hypothetical buy out by either KL or NVO of Kairos or DeGrey or Pacton or portions of their respective [Pilbara region, Australia] gold related tenement holdings/mineral rights.
It has also been my view that ES’s election would evidence which “horse” (as between KL and NVO) he preferred to “ride” (predominantly see his own Pilbara conglomerate gold wealth accumulate in). In addition, like many others here, my analysis has been that ES would personally benefit (profit) to a much greater degree if Novo rather than KL were to be the primary Pilbara wealth creation entity. Given that, it is my present view that ES’s resignation from the KL board effective after the KL annual meeting on May 7, 2019 is a strong positive indicator that NVO will remain independent and that it (and its shareholders) will be among the handful of entities that will most benefit and profit from what I view to be the coming massive development of highly profitable conglomerate gold mining in Australia’s Pilbara region.
It will not surprise any here, then, that I continue to acquire stock in Novo and was a buyer on this news.
Good luck to all, and keep an eye on the news. I believe the QH & NVO RR train is about to leave the station, and I hope everyone else who’s on it will join me in the dining car soon for a rousing round of Waltzing Matilda — I’ll have the champagne plus as assortment of local malt beverages and South Coast vineyard products on ice for you.

Fund Manager: Price Won’t Stay Below $1300 For Long After Thursday’s Paper Gold Raid

Dave Kranzler explains and shows the dynamic that allowed for Thursday’s gold smack-down, but Dave says price won’t stay down for long. Here’s why…Gold was smacked $22 from top to bottom overnight and this morning.  It was a classic paper derivative raid on the gold price, which was implemented after the large physical gold buyers in the eastern hemisphere had closed shop for the day.
This is what it looks like visually:
As you can see, as each key physical gold trading/delivery market closes, the price of gold is taken lower. The coup de grace occurs when the Comex gold pit opens. The Comex is a pure paper market, as very little physical gold is ever removed from the vaults and the paper derivative open interest far exceeds the amount gold that is reported to be held in the Comex vaults (note: the warehouse reports compiled by the banks that control the Comex are never independently audited).
Today technically is first notice day for April gold contracts despite March 29th as the official designation. Any account with a long position that does not intend to take delivery naturally sells its long position in April contracts. Any account not funded to accommodate a delivery is liquidated by 5 p.m. the day before first notice. This dynamic contributes to the ease with which a paper raid on the gold price can be successfully implemented.
In all probability the price of gold (June gold basis) will likely not stay below $1300 for long. China’s demand has been picking up and India’s importation of gold is running quite heavy for this time of the year. Soon India will be entering a seasonal festival period and gold imports will increase even more. Today’s price hit will likely stimulate more buying from India on Friday.


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