October 17, 2021 

Gold Enters Major Bull Market


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 By bluejay

02/15/2006  6:16AM

Professor Bernanke, Alan Greenspan's replacement at
the FED, will make his first public appearance today
in front of Congress on the state of the U.S. economy
and the future of interest rate policy.

Expect the Exchange Stabilization Fund to be in the market today attempting to destabilze gold's price lower. They may have some luck as short term resistance is nearby at 546.

Overall, expect the trading range on gold to be from about 535 to a high of 590 over the weeks ahead as gold continues to move higher during this generational bull market.
 By bluejay

12/14/2005  8:23PM

Gold is currently selling at 504.80 in overseas markets tonight after trading at 502.60 earlier in the session. Monday gold hit approximately 540. This current selling wave is just part of the overall personality of gold during bull markets. Currently, gold is down 6.66% from Monday's high.

The current collapse in gold's price is pale compared to what happened in late 1978 before gold exploded to approximately 900 an ounce the following year. Over a period of weeks gold dropped from the 260's to approximately 200. This short term weakness amounted to a 23% decline.

There is no doubt that soldiers of the paper factory will be pushing for gold to break 500 and hope for a general panic to set in. According to Jim Sinclair when gold is manipulated lower in fast breaks the big Asian buyers play their game by withdrawing bids for awhile only to put in much larger bids lower down. This is what eventually halts gold's fast downside breaks. At some point the sellers from the paper factory are overwhelmed by a mass of funds flooding into the gold market and they quickly retreat. Mr. Sinclair has estimated that gold's selloff will end in the area between 488 and 496.

Will a 23% selloff repeat itself like it did in 1978? The answer is no. Over the past three years the following are the major intermediate percentage drops:

2002 21%
2003 16%
2004 13%
2004 9%

It is quite clear from the shrinking percentage drops that gold is tooling up for some fast action to the upside in the time period ahead. Once this decline is over, fasten your seat belts.

A point of interest: The major gold stocks are currently at their best relative strength figures in many years against gold. If the gold stocks remain reluctant to join gold's weakness in a meaningful way, you can be rest assured that they will lead gold up on the next major push.
 By bluejay

12/08/2005  9:51AM


The top channel line is 520 and not 515. If gold can stay above that level it will be extremely positive and the precious metal will enter its second bull stage of greater price appreciation.

In the meantime, it would not be out of character for gold to go into a price correction lasting from weeks to up to a few months.
 By bluejay

12/05/2005  12:11AM

Gold's last bid price in international markets tonight is 505.40. The high in earlier trading was 508.60.

Gold's current chart position is near the top of an ascending monthly channel formation. In the past few years this ascending higher parallel line has temporarily defused gold's intermediate term energy bursts for the following two to four months.

It would not be surprising to see gold exhibit some short term weakness during the next few months. This foreseen weakness, if it develops, will be just another buying opportunity in this major bull market.

If gold decides to trade above 515, the top of the monthly channel and stays above this area, the old monthly chart formation will prove to be the stepping stone for the start of the second stage of this three year established major bull market. During this second stage prices will move up faster and the declining swings will be scary for the inexperienced.

Unfortunately for the holders of gold related investments, today the Sunday Times in London took a few shots at Gold's recent strength. This is all to be expected from supporters of the paper factory. It wasn't too long ago that England sold their people's gold at under $300 an ounce and now the current price is too high?

These guys are on the wrong side of the market. First, they have no business selling treasury gold and secondly, they have no business calling tops in a bull market that they sold like ignorant fools much lower.

If people are intested in gold's full potential they need to read Jim Sinclair on a daily basis at http://www.jsmineset.com or obtain his DVD entitled THE CASE FOR GOLD. Scroll back in this section to find out how to acquire this historical DVD.

Jim Sinclair is the source of the truth for this once in a life time generational bull market in gold that will last for the next five to ten years.
 By Michael Miller

11/30/2005  4:11PM

Purists know that stock markets are driven by the technical considerations or the fundamental considerations. The advent of television started the broadening of the role of the stock analyst has led to the “gold expert”. Today, we have gold opinions coming from many directions. How does the reader know if the opinions offered by the writer “expert” are believable? One way is to become familiar with their personal background and disclosures. This is something that Bluejay does when he references Mr. Sinclare or others. He knows their background.

I shortened the following from a lengthy article written by a gold expert I trust. I asked his permission in a letter that you can find in the FORUM under Correspondence from the President. I received no answer but fell you should read this man’s opinion.

2005 Jackling Lecture


“ For his outstanding achievements as a mining executive and philanthropist; in particular recognition of his ability to consistently provide superior returns to the shareholders of Newmont Mining and Franco-Nevada Mining for more than two decades; his generous contributions to higher education with focus on mining careers; his always energetic and productive ability to creatively challenge the status quo in the mining industry; and for his lecture: “ Gold: A Lesson in Monetary History.”

Recipient of the 2005 D.C. Jackling Award


Gold has two interesting properties: it is cherished and it is indestructible. From the very early days of civilization in Egypt 4,000 years ago, gold has appeared as a constant for the appreciation of beauty, the storage of riches or the exchange of goods or services.
In that respect, gold can be melted down but the process never damages its chemistry or weight. Gold never disappears. It does not tarnish, oxidize, or burn. Every ounce of gold ever produced still exists today- somewhere, all 136k (15,000 st) of it. As money, it is not an IOU or the obligation of something else.
Gold’s value over time has been a reflection of our civilizations. Humans have fought and died for it. We have expressed our love and admiration with it. And we have created wealth with it and preserved it for future generations. It is The Gold Constant.

The 20th century
Looking back at the 20th century, there have been two major influences on the gold price. On the production side, it’s the total dominance of South Africa, where some 46.65 kt (1.5 billion oz) of gold came out of South African gold mines in the 20th century. That is 40 percent of all the gold ever mined. The Witwatersrand Basin stands as one of the greatest natural resources ever discovered. However, this resource passed its peak in 1970 when South Africa produced more than 995.3 t (32 million oz) in that year. Today, its production is about 404.3 t (13 million oz), down 60 percent and falling.
The other major theme is inflation and its corollary, the depreciation of the value of currencies. At the dawn of the 20th century, Britain was at its apogee. The Pound Sterling was anchored to gold and there had not been any appreciable inflation in commodity prices in 200 years. Imagine the price of a loaf of bread was the same in 1914 as it had been in 1717. That was to change dramatically in the 20th century.
In 1971, the price of a barrel of oil was $2.71. By 1973, it had increased to more than $12 per barrel, a five-fold increase. We had a full-blown energy crisis on our hands. By 1978, the price had reached more than $40 a barrel. And every one believed it was only a matter of time before it reached more than $100 per barrel. Because the world economies were very energy intensive, the price rise was very inflationary.
Fast forwarding, in 1988 oil bottomed at $12 per barrel. Since then it has increased over four-fold to more than $50 per barrel. Yet inflation is still tame. Or is it? The perfect conditions for higher inflation have been in place for the past year or so: high oil prices, a weak dollar a very stimulative monetary policy and accommodating fiscal policy. Yet the official government indicator, the consumer price index, which has not shown much of a concern. It does not help that most people think that the consumer price index is a “ massaged, fudged, and assumed seasonally adjusted, figment of some bean counters over-active imagination.” We are paying more for gas at the pump, housing, medical services, restaurants and football games. On the other hand, the microwaves we purchase from Chine have fallen in price by 50 percent, as have most electronic products, clothes and 70 percent of the “stuff” sold at Wal-Mart. So who is right? It is a bit like having your head in the oven and your feet in a bucket of ice. On average, the temperature is just fine, but it is hard to tell.
In 1971, President Nixon had to make a choice. He could keep the dollar on the gold standard and see the U.S. gold reserves melt away as France, England and other European countries wanted to redeem all their dollars for gold. Or he could close the gold window and let the dollar float. He chose to go down the slippery slope of inflation. He chose the politically expedient solution: allow the dollar to float. The currency plunged and gold soared. It went from the fixed $1.12/g ($35/oz) to $2.90/g ($90/oz) in a matter of months. As inflation ratcheted higher, the gold price followed.
From 1970 to 1978, the dollar lost about 50 percent of its value against the German Mark and Japan’s Yen. Faith in the dollar reached its nadir in 1978 when the Fed issued the infamous Carter bonds. As the world did not want any more dollars, these bonds were denominated in German Marks and Japanese Yen. Gold soared even higher, reaching more than $25.72/g ($800/oz) in January 1980. A rise of more than 2000 percent. The world had never seen any thing like this. It had lost faith in the dollar and rediscovered the role of gold as the ultimate currency of last resort.
As we enter the 21st century, the major differences from 35 years ago are the following:

The savings rate. In the 1970s, the U.S. savings rate was around 8 percent. Today, we are in the 1-percent to 2-percent range. I call that negligible. If you do not save, you do not have any money to invest. And so it is today that all our investments are paid to foreigners. In effect we are selling 1 percent a year of our economy to foreigners. Not a healthy situation. As the boomer generation begins to contemplate retirement, they will have to change their behavior. They will have to save more and that could have a dramatic effect on the economy.

Debt. In the 1970s, the total debt in the economy- personal, corporate, and government- was 130 percent of the nation’s gross national product. Today we stand at a towering 210 percent. The last time it was that high was 1933, when national income had fallen by 33 percent. This is not a good sign, particularly at a time when interest rates are at an all time low. Whet will happen when interest rates inevitably rise? I shudder just thinking about it.

Inflation (or the lack thereof). In the 1970s, labor had an inordinate amount of power. It was able to extract huge wage gains that pushed inflation in a viscous tandem between cost-push and demand-pull. It took Fed chairman Paul Volker, with sky-high interest rates of more than 20 percent, to break the back of the inflationary spiral. Today, China, India, and much of Asia are exporting deflation, not only in manufactured goods, but also in wage deflation. China has 18 million workers moving to the cities every year looking for work at $5 a day or less. The good they produce are exported worldwide and compete with local goods that quickly become over priced. The result is that the local manufacturer closes its plant, resulting in massive lay offs at home. The manufacturing sector in the United States has lost millions of jobs during the past ten years because it cannot compete.
The choice that President Nixon had to make in 1971 is made daily in the foreign exchange market and the offices of the Central Banks of Japan, China, Korea, ect. In fact, we have seen the first major cracks appear. South Korea, the fourth largest foreign holder of U.S. dollars, announced earlier this year that it would start diversifying its holding with other currencies. Earlier, Russia quietly made the same decision. It is only a question of time before China and Japan, the two 800-pound gorillas, to come to the same view. When they finally move, the ground under the dollar will shake and then part. Gold is up almost 80 percent but I do not think that’s the end. Far from it, and here is why.
My view is that we will see a return of gold as currency. The launch in November 2004 of the gold exchange traded fund on the New York Stock Exchange is the first step in that direction. This instrument brings a new, easy way for people to own gold. And in less than a few months, more than 280t (9 million oz) of gold had been purchased through this fund. This is just the beginning. Investors, pension funds and institutions will come to a point where they will use gold as an asset class diversifier.
Gold is the only currency that is not the debt of some one else. Let me say that again, gold is the only currency that is not the debt of some one else. It has intrinsic value, unlike currencies that are only as credible as the state that issues them. That is why gold has had such a fundamental role in financial history. And history repeats itself. I suspect that gold 20 or 50 years from now will still have the same purchasing power as it has today. I do not know that I could say the same for the U.S. Dollar. That is why we call the yellow metal “The Gold Constant.”
 By Rick

11/30/2005  8:21AM

This morning, around 5:10 AM, I was listening to the Wall Street Journal Report (a daily one-hour radio show aired on 1530 KFBK) and their focus was on gold and the building market. One guest analyst mentioned the opinion of the CEO of the world's largest gold-mining company (was it Barrick?) who believes gold to actually reach $1000/oz within the next five years. The analyst didn't necessarily reflect this exact prediction, but did say that gold has established a firm base this time around, unlike 1987, and jewelry demand in India seemed to be driving the supply-side, followed by China. Some cultural issues in India apparently push gold jewelry ahead of other practical personal belongings (cars for example) and the demand will continue to grow as the population grows.

Demand for product is, of course, so much different than the trading on a commodities exchange, yet this analyst went on to suggest that acquiring a position in gold through the mutual fund market was a wise choice, foremost in gold mining companies who hold not only potential but gold itself; the commodities exchanges would naturally try to stay ahead of this game, but the general public should try the more practical approach. This such talk, from a reputable source through the reputable Wall Street Journal Report, suggests what this Forum topic has been saying all along. It also may be the first time in quite awhile that gold may be rising due to demand, not inflation fears as in the past.

Lets get that shaft sunk!
 By Michael Miller

11/28/2005  3:21PM

Up until recently I was unaware of the depth of the Dubai gold situation. I know so little about it that I am unprepared to offer opinions on its effect. Why has so little been written about a truly wild and crazy new twist in the old historic gold market? Dubai could be one important reason explaining the rapid increase in the spot price of gold. Next time you are in the coffee shop or out and about with friends or strangers, ask them what they know about the Dubai entering the gold business. I plan to do this. My belief is that few will have heard of the newest worldwide player, Dubai.


Dubai Gold & Commodities Exchange (DGCX), the world's newest commodities exchange began operations on November 22, 2005. The DGCX also confirmed that the Dubai Commodities Clearing Corporation (DCCC) has been incorporated. DCCC will perform the role of clearing house of DGCX and will handle clearing and settlement functions for all the trading related obligations, according to reports in the UAE's dailies.

DGCX is planning for a bright future straddling East and West. The exchange expects to be trading several thousand gold futures contracts a day by the end of next year, with four to six products on the market, according to chairman David Rutledge. The exchange, a joint venture of the Dubai Metals and Commodities Centre, Financial Technologies India Ltd and the Multi Commodity Exchange of India Ltd, will open with the trading of gold futures. Silver futures will open in the first quarter of 2006, followed by gold and silver options and then by steel, freight, cotton and fuel oil futures.

The exchange is also fortunate to launch at a time when gold prices are at historic highs and interest in gold is rising, Rutledge said. Spot gold was trading at US$499 an ounce after hitting a near 18-year high of US$480.25 last week. Funds have begun buying gold as a hedge against inflation that is expected to be fuelled by record oil prices. The exchange, which will trade seven days a week, is aiming to serve as a bridge between the Far East and Europe. DGCX is also likely to benefit from its proximity to India, the world's largest gold consumer. Rutledge said the exchange's primary focus was to attract participants in the precious metals business in the Middle East, South Asia, or even the United States, since it allowed remote trading.
Gold is unusual in that it is both a commodity and a monetary asset. Because it is virtually indestructible, all the gold that has ever been mined still exists above ground in some form or another and, theoretically, the majority of above-ground stocks could easily be mobilized. That is to say that they are in simple, relatively unfabricated form. As a result of this feature, any upward spike in price is often met by the resale of above-ground stock and this is one of the reasons why the gold price is historically less volatile than the majority of other commodity prices. It also explains why gold’s forward markets are generally (but not always) orderly.
The World Gold Council estimates that at the end of 2004, above-ground stocks represented a total quantity of approximately 153,000 tons, of which 63% had been mined since 1950.
 By bluejay

11/27/2005  3:27PM

The gold cartel is short 16,000 tons of gold.

To get the full story go to http://www.FreeMarketNews.com and listen to an eRADIO broadcast with Mr. William Murphy.
 By bluejay

07/28/2005  7:16PM

Jim Sinclair at the free website http://www.jsmineset.com has reprinted an article from Forbes entitled, "A Golden Solution To The China Syndrome" written by Richard Lehmann on 7/27/05.

The article is well worth reading. The story discusses gold as an alternative investment for China's growing reserves which are forecast to reach $1 trillion dollars by June of 2006.

This is the very first article from Forbes that I have read which depicts gold in a positive light.
 By bluejay

07/17/2005  8:19PM

The following is an excerpt from a July 15, 2005 article by Mr. Paul van Eden entitled "The devaluation of gold" that appeared on kitco.com

By comparison, the U.S. money supply(as measured by M3) has been increasing by an average compound rate of 7.8% since 1959.

While gold devalues at 1.73% per year, the dollar devalues more rapidly.

The value of gold in US dollars has therefore increased at an average rate of 6.07% since 1959.

Note that I did not say "the price of gold" in the previous sentence.

We all know that gold was underpriced at $35 an ounce in 1959.

According to work I have done, I estimate that the gold price should have been about $51.22 an ounce in 1959 and, if you assume that that is more or less correct, you can calculate what the gold price should be today.

Compounding $51.22 at 6.07% for 46 years results in a current value for gold of $770 an ounce.

To better understand why the value of gold depreciates by itself without weighing any factors plus some more interesting facts concerning gold go to kitco.com and read the informative article.
 By bluejay

07/15/2005  11:10AM

The price of gold continues to build up strength for its next advance. During the past six months gold has been resting roughly in the $420 to $440 area. Its price today is in the bottom area of its current trading zone at $419.

Gold's price since its bull market started in late 2002 has basically been to hit new extreme trading highs every 11 months. The last high took place 7 months ago near $460.

If the advancing perpetual motion that has been in effect since 2002 continues, gold should hit $490 an ounce during the month of October. Usually tight trading ranges, like the one witnessed during the past period, provide fast short term advances which could consume up to eight weeks in duration.

Currently, the major gold stocks are taking a breather following a few weeks work at their overhead resistance levels. The major gold stocks have recently been displaying excellent relative strength compared to the gold price. This in the past has indicated that an impressive move higher in those gold mining shares is near.
 By bluejay

05/10/2005  11:35AM


A graph of the ratio between the dollar gold price and the Philadelphia Gold and Silver Index going back to January of 1984 is available at http://www.mineweb.net/sections/other_minerals/438667.htm.
 By bluejay

05/09/2005  10:55AM


There is a free and exemplary DVD discussing gold now available. The DVD is being offered by MONEX out of Newport Beach(800 949-GOLD). The interview is with Mr. James Sinclair. This DVD will be a classic.

Concerning the gold stocks, the most reliable 1 year indicator is the ratio of the dollar gold spot price to the Philadelphia Gold and Silver Index(XAU). So says Myles Zyblock the chief North American institutional strategist for RBC Capital of Canada.

Recently, Mr. Zyblock has identified a buy signal for gold stocks. Currently the gold to XAU Index ratio is 5.08. Byblock's bottom line: buy gold stocks when the ratio is above 5 and sell them when the ration is below 3.

Selecting gold stocks is a difficult pursuit as compared to holding the safer bullion but they can be extremely rewarding if you are holding the right one.

The quality players in the gold stock sector are presently favoring Jack Dempsey's Royal Gold. Mr. Sinclair is also positive on this one. As you might well know, Royal Gold is a gold royalty company with almost all of their revenue stream coming in from mines in Nevada which are operated by the majors.

As far as exploration gold stocks are concerned, our own 16 to 1 is an asset rich play with excellent prospects awaiting a higher gold price.
 By lynwood

04/29/2005  6:55PM

When gold was selling for $250 an ounce, who was buying the physical commodity? Was the supply of gold consumed in manufacturing? Did it go into storage of value? In predicting the price per ounce of gold does supply and demand rule? What does this mean for the gold producers, refiners or central banks? Gold shares have dropped. Why? Is it less demand for speculators and investors of their stock or is it because the price of gold has hit a plateau? Years ago the federal government tracked production and other information about gold. No one seems to care anymore. Is gold still an economic factor in global business? There hasn’t been a good book with fresh ideas on gold for years, at least not in the past five years. Is gold manipulated like other commodities? If so, who are the players? Do foreign government care a whit about gold? Are the oil producers acting like they did in the late 1970’s regarding their interest in gold? There are too many questions for me to get a handle on future price trends. Bluejay, you are probably a chartist and use the past as the foundation as an indicator for the future. You have called it right in the past but has anyone developed another way to follow gold? If so, write a book or post it here. As a storage of wealth gold appears undervalued.
 By bluejay

04/29/2005  8:38AM

Gold shares have been jolted with selling recently. During the past eight weeks the Philadelphia Gold and Silver Index(XAU) is lower by 21%.

In early 2003 a comparable assault took place on the XAU Index during a similar eight week period by a greater percentage of 26%.

Unfortunately for people that sold in early 2003, they missed the 85% move that directly followed.

Shake out moves like these are extremely difficult to forecast or almost impossible to predict. The important point is while the herd gets scattered don't let your emotions control you. This is not a fight or flight situation.

The current pressure on the gold stocks is being orchestrated by a desperate group of people who are having nightmares at the thought of a much lower U.S. Dollar, which is coming.
 By bluejay

03/21/2005  9:24PM

The word out tonight is that the Japanese are taking the Dollar higher to make their fiscal year ending March 31st look better. This is no more than marking up a losing position to save a little face for the day.

This type of short term market manipulation happens frequently when individuals or a group of people have a continuing nagging loss. Japan is the largest holder of U.S. Dollars.

It seems reasonable to expect the current weakness in gold to fizzle out at or very near the end of the month.

Smart market players are buying the gold stocks on the current weakness. The exploration stocks continue to look higher as they awaken from their long dormancy.
 By bluejay

03/11/2005  11:13PM

Words of wisdom tonight from the jsmineset website spoken by Mr. Jim Sinclair who is referred to as Mr. Gold by the New York Times.

"The end of the game expected in 1980 in fact is here with 2008 written all over it. When the world recognizes that the CPI and the PPI are "CARTOONS" fabricating conditions that do not exist, the house of cards will implode upon itself."

"Gold will be the "last man standing." You either own it or you will not be standing. A little goes a long way."

"Gold shares now plastered into the basement of single digits will rip the shorts a new behind. What is going to happen in the next three years will set your hair on fire."

Also, a significant article appeared on http://www.jsmineset today written by Mr. Dan Norcini of Houston, Texas. The message is clear and well presented, the days of low interest rates are over.
 By Jawa

01/04/2005  10:05AM

Blue Jay, What about us guys holding Rands? Should we invest in Cheese?
 By Vumba

01/04/2005  9:11AM

Bluejay: We all know gold is in a Bull Market, so what else is new?????
 By Surferdan

01/03/2005  10:24PM

Bluejay: If you look at the fundamental, a screwed up world, you can see that gold is going to go up, up and up. Maybe to $1,000. by year end. Who are these guys you mention, Lars Lindgren and Jim Sinclair?Why not just use common sense?

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