Jim Sinclair's immediate predictions on the gold price
Posted on 27 May 2009 with no comments from readers
Jim Sinclair is the doyen of gold experts. It is interesting to see a very clear timeframe for the gold price posted on his website today:
1. Gold reacts as currency support for the dollar enters mid June to a slow decline (that is the official definition of a strong dollar policy, really).
2. End of 2nd week going into the beginning of the 3rd week of June Gold launches towards and this time through the neckline of the reverse head and shoulders formation.
3. Gold rises to $1224 where it hesitates.
4. The OTC derivative market takes on the dollar as short sellers into dollar support.
5. This OTC derivative currency short position builds.
6. It is the US dollar where Armstrong will get his WATERFALL.
7. The main selling takes place when Israel makes a major miscalculation.
8. Hyperinflation is always and will continue to be a currency event.
9. Hyperinflation will be a product of the upcoming massive OTC derivative short dollar raid.
‘Should I be correct in the gold price action going into late June, it will fit Armstrong’s criterion for a move to $5,000′, adds Mr. Sinclair whose predictions are not always right, and who got similarly carried away last summer.
But there is the old mantra in forecasting that if you repeat something often enough then it will be bound to happen in the end. And to be fair to Mr. Sinclair the gold positive scenario stacking up right now does look unstoppable.
Do visit his website from the right-hand navigation for more on his views.
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May 26 (Bloomberg) — Gold may target a record $1,250 an ounce as a continuation head-and-shoulders pattern may be forming within a longer-term trend, Standard Bank Group Ltd. said, citing trading patterns.
A break and close above $1,050.40 “provides warning that an important breakout” has occurred, Darran Grabham, the bank’s technical analyst, wrote in a note yesterday. A head-and- shoulders pattern is formed when a commodity makes three consecutive peaks, with the middle being the highest. It forms during a series of increases over time.
“The positive implications are substantial, with the minimum objective situated at $1,250,” Grabham wrote.
I would love to know what makes Mr Sinclair so confident about the end of next week, 15th to be exact, for a crossing of the $1,000 barrier – it is still tantalizingly close at $955 this morning. Once that mark is broken the upside potential looks another 25% and the upward drag on silver and precious metal stocks would be even stronger.
This today from Rick’s Picks:
In the meantime, those who have been accumulating coins, ingots and gold shares can relax, since whatever disasters may have befallen nearly every other class of investable assets since 2006, the damage did not even touch gold. To the contrary, the metal has been a solid winner during that time, regardless of the state of the economy and the financial system, and despite mounting fears of inflation, hyperinflation, or deflation.
13 Barrels Per Ounce
Even crude oil at a current $70 a barrel has lagged gold by a wide margin, as the chart above shows. You could have bought six barrels of oil with an ounce of gold when both were topping out last July; now, with gold trading well off its highs, you can buy 13 barrels. We think that ratio will triple, at least, before gold has fully discounted the ongoing destruction of the dollar.
Meanwhile, even though Comex Gold has dropped $65 since early June, the technical picture looks untroubled. We’d projected a drop in the August contract to 925.50 per ounce to begin with, and yesterday that target was very nearly reached on a low of 926.50. We were buyers there, but we’d buy even more if our target gives way and August Gold eases down to the next “Hidden Pivot,” $918. Bullion bears, take note: Comex futures would need to drop a further 13 percent, exceeding $810 an ounce to the downside, to cause even minor damage to the bullish case on the long-term charts.