Sentiment Speaks: Gold Is Heading To $25,000
by: Avi Gilburt
- Anecdotal and Other Sentiment Indications.
- Price Pattern Sentiment Indications and Upcoming Expectations.
Can Gold Go Higher? - An Elliott Wave PerspectiveThe simple answer is, yes, it is possible that it can go higher. However, there are clear levels that must be watched so that investors do not get caught in a downdraft when a top is hit. . . since we are most probably in the final stages of this parabolic fifth wave "blow-off-top," I would seriously consider anything approaching the $1,915 level to be a potential target for a top at this time.
Technical analyses is all well and good, but you cannot apply it to the PM sector which has been artificially manipulated and suppressed for years.
There is no way you can understand what is going on in gold by doing technical analysis. Gold is driven by fundamentals and technical analysis comes only as a distant second in the analysis. If the Fed announces QE3 (I think they will do it but not tomorrow), gold will go up like crazy and no technical analysis can predict this.
With all due respect Avi, you plainly do NOT understand the gold market. . . Because of these fundamentals, gold does not work very well for technical analysis, for charting. Algorithms which are indicators for other financial instruments are rather useless for gold.
TA is useless for a sector that is so heavily rigged and manipulated by the bullion Banks Your TA is useless. You don't understand the fundamentals because you only look to the past. Gold bulls are forward thinking. The times they are a changing...
But, as of late, we have developed a new class within the metals market. This new group is generally bullish on this complex for the long term, but they are certain that one should not even consider buying until we see a strong capitulation with a spike down below the $1,000 level. I call them the "below-1k-dip-buyers."
Now, I have to be honest and admit that I proudly considered myself within this class of investors not too long ago. In fact, even before the market topped within $6 of my target back in 2011, I suggested that the correction can take us down as low as the $700-$1,000 region, despite the mass disbelief at the time. But, as this "below-1k-dip-buyers" class has grown quite large, I am now questioning the wisdom of such affiliation.
Ideally, this new class of investor makes the most sense of all. The perspective is that a final spike down below the psychological $1,000 level would make almost all the bulls throw in the towel, which would then see the final sellers move out of the market, thereby creating a lasting bottom to this 4+ year correction. Yes, this is how markets normally work . . . except when this is what a large segment of the market expects.
And, the "below-1k-dip-buyers" class has grown quite large. In fact, if you discount the gold bulls and the gold haters, all you have left are the "below-1k-dip-buyers." Right now, I think the rarest breed of all are those willing to buy between $1,000-$1,100. And, they may actually turn out to be right.
" should mark the final correction of the 13 year pattern of defeatism. This termination will also mark the beginning of a new Supercylce wave (V), comparable in many respects with the long [advance] from 1857 to 1929. Supercycle is not expected to culminate until about 2012."
I stand before you today, almost feeling like Elliott did back in 1941. Yes, in 2015, I am seeing this correction finally completing (but at much lower levels) and starting a major bull market phase that can last the next 50 years.
So, while many that have read my analysis over the last three years have viewed me as being the staunchest of bears in the metals world, I will be switching sides and moving strongly into the bull camp, especially after we see the next and final decline which will likely take place over the next half a year.
In fact, if you look at the Gold Bugs Index HUI, chart linked at the bottom of this column, you will see that our projections are calling for an almost tenfold increase in this index over the next decade or so, which will likely increase to a fifty-fold increase in the index over the next 20 or so years, and well beyond that in 50 years. Ultimately, we see the HUI over 15,000.
Yes, I know that this is quite a bold prediction. However, please remember that, for me, it is all a matter of mathematics and nothing more.
Now, let's put this market prediction within the context of Elliott's back in 1941. At that time, the Dow Jones Industrial Average was around 100. Yes, you heard me right. 100.
Seventy years later, we are at a multiple of more than 180 times that baseline. Our base line in the Gold Bugs Index will likely be in the 100-125 region when it finally bottoms. So, based upon this relative perspective, does it seem so unreasonable to foresee this index as high as 15,000 within 50 years?