My Home     About Me

0920 EST Friday December 02 2005

Good Morning: Yesterday, our opening comment was as follows: In one of the more unusual statements we have ever made on Gold, Wednesday, we suggested that a stronger US Dollar might actually help Precious Metals move higher. Amazingly, that is actually happening this Thursday morning with some alacrity and this could mean a rebound in Equities may also be in the offing as there seemed to be a reluctance to for the stockmarket to follow through lower, and we did suggest a pullback to Dow 10,800 as the likely maximum short term downside.

We could not have asked for much more than the stunning 110 point move higher in the Dow Jones Industrial Average, new all time record highs in the S&P 400 MidCap and the Mexican Bolsa storming towards our 12 year target of 17,500 two years ahead of schedule smashing through the 17,000 ceiling, along with most of its Latin counterparts, is just blowing away all the doubters who don't understand the unprecedented dynamics behind this incredible Global Market Advance of Epic Proportions, that elsewhere in the World resumed its powerful upmoves overnight with a vengeance as the Korean Kospi joined the ranks of new all time record high bourses Worldwide and the unstoppable Nikkei 225 soared in a tremendously powerful breakout surge towards 15,500.

It's safe to say that no-one has been more bullish on the Nikkei than ourselves, being the very first in the World to call for new all time highs of 40,000 plus by as early as 2010 and 100,000 by 2030, but at the rate we're going, this could occur before year 2020.

Now to cap it all off, overnight Gold surged to new 23 year highs at $510 per ounce and already 2009 Gold is trading at $600 plus. Overnight, news that renowned Gold Analyst Christopher Wood, based in Hong Kong, is re-iterating his call for Gold to reach $3,700 by the end of this decade... As you already know our target is somewhat more modest at $1785, but should Gold in some kind of extraordinary short squeeze blowoff sometime in 2006 to as high as $950, then the case for $3,700 Gold some years hence could become increasingly credible. In our view on a scale equal with the lift-off of the Dow Jones from 777 in 1982 to around 1,500 by the middle of the Eighties and what makes this comparison compelling is the incredibly similar wave pattern that is unfolding, then Gold today is about the same level as the Dow in 1985. But from that point the Dow rose almost 90% over the next two years and that would put Gold at around $950 per ounce, but because the Gold move is somewhat truncated, it could happen much more rapidly.

And, given that this scenario might well unfold, especially with the rumored gigantesque short positions that are rumored to exist in Gold, then the mother of all short squeezes could be about to unfold and the fundamentals and supply demand dynamics have never ever been more bullish than right now in all of history. With almost a 1,000 top pear annum growing supply demand imbalance that could put Gold in an increasing deficit of supply situation for 7 years, the situation could not be more bullish. Ad to that the Global degradation of Currencies over 25 years and Gold has a lot of catching up to do. As much as a 4 ~ 5 fold catchup in actuality. And, we are going to expand on this theme over the weekend as being partially responsible for the current Global Economic Boom, that is actually being sustained and fomented by the undulating fluctuations of Global currencies over the past few years, we will explain. Suffice to say should we emerge from a range in the $500 ~ $700 range in Gold by late 2007 ~ 08: $3,700 Gold cannot be ruled out.

Trade Well
From the Desk of Savant

Basic Materials sector   Technical chart patterns   support/resistance levels   ETFs (exchange traded funds)   Deron Wagner   iShares Hong Kong (EWH)   S&P 500 chart pattern   emini's S&P 500   earnings   economic data   Biotech HOLDR (BBH)   Emini's Nas 100   Short selling ETFs   exchange traded funds   sector rotation   etfs   corn futures   selling options   commodities   mcio