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Gold and Silver Soar 'Limit Up' Together - The first time this has happened in 26 Years - Expect more

We have been saying for a long time now to be ready for the day when Gold and Silver might quite suddenly and without warning, rise very sharply in such a way that the move happens so fast that you might not actually be able to take advantage of it or realize it was happening until it was too late. And yesterday such a day unfolded, stealthily and without warning from one of Gold's characteristic pullbacks that we had noticed were being increasingly bought up and rebounding, albeit less dramatically over recent weeks. In fact, yesterday on CFRN we were actually commenting on this very fact, but made the emphatic point relatively early in the day when Gold was up less than double digits, that this day felt different, very different. And we were already making calls for the Gold price to be $700 perhaps, by the weekend or next week. And our reasoning for this was the sudden and dramatic surge that was giving Gold, Silver, Platinum, Palladium and Copper intraday profiles that were the most bullish that we had seen in some time, in fact a very long time and we also commented on how the grain markets were soaring ever higher again yesterday as they have been since we published our special report back in mid-January, entitled: "Global Warming Mega-Inflation Coming", in which we not only emphasized how high Grains might soar, but forecast there and then that we pretty much expected new all time record highs across the board and to get ready for $3 and $4 loaves of bread sooner than you think. Folks, ever since the ink was dry on that report, Grain markets have been soaring and yesterday, it kind of brought Gold and Silver and the metals to a head, with Nickel and Zinc over in London setting new records highs, next thing you know meats are soaring, Pork Bellies soar over 100 and finish limit up for the first time in many months, Cotton joins in finishing stronger and then the "Inflation News" of earlier in the day and just like we have said in the past creeping inflation is akin to throwing gasoline on the fire, became the catalyst that literally sent the Precious Metals markets "through the roof" again bearing out what we had said just a few days ago... That the inflation that has been baked into this 21st Century Birthday Cake is the mother of all Soufflés that will rise so high it is going to affect all of our lives dramatically in time. Even Rice futures soared on fears of renewed Asian demand. And not long after our Mega-Inflation report, there was rioting in Mexico over rises in Tortilla prices due to the very large runup in corn prices that yesterday hit their second highest levels in history.    

What does this mean for the future? To us it seems the market is sending us the strongest possible message that actually is the most powerful warning the market has delivered in 26 years... Think about this... You already know how we have expounded up the idea that with the Gold market having been restrained by the $500 barrier for the past 26 years and now that we have broken out, the immensely powerful basing action that this has entailed, is in fact now manifesting itself in an intimately more powerful way than the Dow began to do when it broke out of the 1000 point level that held it back for a relatively speaking much shorter time frame amounting to just 16 years...   If the stodgy old Dow can rise 10 fold in less than two decades pray tell how high can Gold soar off this base after being held back for 26 years and more importantly, how fast, especially given Gold and Silvers propensity to come from behind and go parabolic with gains in the 20 to 50 fold range as happened in just 10 years back in the 1970's.   The Biggest Bull Market Ever   Because of the length of the base in Gold and in particular because of the latent power that Gold and Silver are now starting to exhibit with tremendous force and speed, we expect a growing momentum to unfold to the upside that could be a carbon copy of what happened in the late 1970's, actually from around 1978 where Gold and Silver began to rise methodically and relentlessly, week after week and month after month in much the same way as they have been rising quietly and relentlessly week after week this year, until yesterday when they stepped on the gas:   The most important and powerful message the market sent yesterday was that for the very first time in 26 years, Gold closed 'Limit Up', something that really did not happen last year in Gold's entire early run up, even though the Silver not only closed Limit Up on occasion, it did even better, managing to close up near "Double the Limit" at almost $1 once or twice, but never together with Gold... Until yesterday. Folks as we've said before, the last time this happened some of the Comex floor traders of today, weren't even born or were running around in diapers... So how important were yesterday's developments... Hugely important... Beyond the pale... In fact in our view, they're the most significant developments of this entire bull run since inception and double bottom in 1999 and 2001.      Just a week ago, we implored readers and almost daily to listeners to www.CFRN.net to remain fixated on the 1970 inflationary theme and chart of Gold not only for the whole of the 1970's but more specifically the last part of the decade which we believe is being increasingly emulated by today's markets and we implicitly state now as we have so many times in the past to be prepared and ready for experiences that we may find hard to imagine in the future and to "Expect the Unexpected". In a bull market, the "surprises are on the upside" - Yesterday was the first very big surprise in a long series of surprises we now foresee. The market has finally woken up to the fact that the core rate of inflation is rising and there is very little that can be done to stop it. In the 70's it began as a creeping type of inflation as now with just a 0.20 or 0.30 number but by the time Gold was at $875 inflation was running at 1.3% per month and interest rates soared to 21% and Treasury Bonds to 14%. As we have reported in our special report 'The Trillion Dollar Killing' this is the scenario in which unfathomable fortunes will be won and lost in the years ahead and it is incumbent upon investors to be especially prepared for events that will literally rock the World as we it...   It has been our good fortune to have called almost every major top and bottom in the markets over the past 30 years or so and many dates our burned in our memory... August 12 1982, July 1987, July 20 1990, January 16 1991 and December 12 1994, the most important turning point weeks of the 1990's and November 1998 for the Russian stock market bottom. March 24 2000 at 2PM our now legendary sell signal and the most recent market bottom of March 2003 and the surge week of April 2003 where we called for new all time highs in the Russell 2000 and S&P 400 MidCap to set new all time record highs before year end 2003 and nearly four years later they are still setting new all time record highs right up until yesterday. That is the kind of power that is starting to take hold in the Gold and Silver Markets and because of that we believe you may be about to embark on "The Ride of Your Life" as the biggest bull market ever begins to move into higher gear as it enters a potentially accelerating upward phase. And so because of this we are actually raising our estimates for Gold as follows believing that $1,250 ~ $1,500 is a new interim target range for the first stage of the run up and $1,785 ~ 2,400 for the second stage runup in 2009 ~10.     Here are some guidelines as to why... A refresh of previous comments plus additional analysis   In early January 2007 we broke new ground with our special report: Global Warming Mega Inflation coming in which we outlined how Grain prices would soar along with just about everything else including Oil and Gasoline and almost immediately thereafter, all of these vital commodities began to move up very sharply indeed. And, for the first time in eons, we began to witness what we have been waiting to see in Precious Metals for a very long time. The feeling that they're beginning to rise on no particularly noteworthy news, irregardless of what the US Dollar is doing, they just started to feel like a balloon being held under water, wanting to burst forth higher. And, as has been said A market moving on no news is a potentially very powerful market. The Gold & Silver markets feel almost exactly like that right now as they are starting to separate or diverge from their stockmarket linkage behavior, by actually accelerating higher and potentially beginning to outperform stockmarkets around the World, breaking to the upside in a more firmly impressive and methodical way, than we have actually seen in almost one year.   And, as we have more recently surmised: Whether we are at the beginning of a new 10 year Gold uptrend that could be an even larger re-run of the early 1970's or perhaps more on a timeline similar with 1977 or 1978, we need to remain fixated on what happened to Gold over that period - It rose 20 fold and Silver rose 50 fold and much of it happened, or at least the most dramatic part of it happened in the latter period between 1978 and 1980 when Gold rose to $875 and Silver to $50. So, we all  need to be totally focused on that timeline from the late 1970's as to be perfectly honest: It looks and feels an awful lot like that right now. And what really is really intriguing is the similarity of what happened back then tow what is happening now. That is, following a brutal 20% correction where most people threw in the towel on Gold and hollered that the top was already in back in 1978... Instead, the market began to strengthen increasingly and relentlessly, day after day, week after week and month after month, to a point where the Gold price was announced each evening on the nightly newscast, with the same kind of nonchalance and lack of attention, that so many new Dow Jones all time record highs have been periodically announced over the past 25 years or so. Lack of attention that is, until Gold and Silver prices started bounding ever higher, setting 'limit up' new all time records and with increasingly high frequency.   Then all of a sudden the whole World was attentive to Gold as markets began to soar beyond imagination... Back then, this was no dress-rehearsal, this was the real thing and if you were not majorly long Gold you were truly an investment dunce at the time... 28 years later almost to the month as Gold and Silver temporarily peaked, followed by a modern day brutal 20% correction last year, some fell into that same trap in recent months calling Gold's bull run over, but not us, not here. In contrast, being avowed students of financial history, we have become increasingly bullish on Gold and Silver in recent months and are we ever thankful as Gold and Silver have soared anew. The good news for us today is, thanks to the 1970's, we've already had our dress rehearsal and this time it's not just the real deal, its the mother of all real deals that could take Gold to the kinds of staggering heights, that up until recently might have been described as folklore or fantasy. But, that is for sure no longer the case... There are just too many issues piling up and too much bad news and inflation suppression has been postponed to the point where all of these incredibly powerful forces have been steadily compounding in the background building energy within a long base that has been contained by $500 for nearly the past 26 years to the point wherein a chain like reaction they'll manifestly amaze in time in ways that if predicted today, might be dismissed with ridicule, in the same way as those who forecast equally staggering heights for Gold in 1978 were treated at the time... The good news for Gold and Silver investors this time around is that the fundamentals are superb, and as we've been saying here for years, the World is actually running out of Gold to the point that without additional major discoveries, multi-hundred ton shortfalls are likely quite soon. And we believe the closer Gold gets to its all time record highs of 26 plus years ago, the more likely Gold could go well beyond those highs, perhaps to a new all time record high target range of between $1,250 and $1,500...   Our reasoning is simple enough: The Dow Jones Industrial Average has already risen more than 1,000 points or almost 10% since it broke to new all time highs last year after a six year interval and the Transportation Index has actually risen 36.55% since it last set a new record high in May 1999. Since then is has risen to 5,185 after only a 7 year hiatus. Imagine what that would do to Gold: A 36.55% rise would send Gold to almost $1,200 and that would be after a half dozen years or so... Imagine what a 26 year time span could engender and especially already knowing Gold and Silver's strong tendencies in the past to: "Go Parabolic" with 20 to 50 fold gains or so.   The coming upside on Gold after being restrained by the $500 barrier for 26 years, is an even longer base than the 1,000 Barrier that held back or restrained the Dow for 16 years or so and look how far we have risen since, in only two decades to start with. The fundamentals are compelling and the technicals will bear things out soon.   The best news is still to come and that is it is right here right now. And that clearly is: Many mining issues, especially emerging miners have become increasingly undervalued, as Gold and Silver's fundamentals and now their prices have started to methodically move higher over recent months and also appear to be accelerating to the upside. The stealthy nature of recent metals price increases have not yet been reflected in many junior mining issues such that the real prices of these Gold companies are not just getting more valuable, they're getting substantially more valuable as the value of Gold edges higher, as it has been doing. At $700 per ounce, the profits for many mining operations with a price of production at say $200 per ounce will mean an almost unheard of and previously impossible $500 profit per ounce for many companies and now with the Future price of Gold for December 2007 already at $710 today and technically obtainable through ability to actually receive such prices pre-selling future Gold production forward on various Gold exchanges around the world, maybe the Gold World has never had it so good given the technological advancements enabling its lower production costs.   That's why investing in emerging mining company shares could potentially yield monumental results, perhaps many times those of investing in Gold itself, because Gold exploration companies provide enormous leverage in times when Gold and Silver are rising sharply. It is not uncommon for junior mining companies to experience huge gains of 10 X or more compounded several times over entire bull market cycles which can last anywhere up to 30 years... Trade Well From the Desk of Savant

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