The Fed’s recent inference that QE3 was not imminent has caused physical gold and silver and the HUI and XAU to breach their downside support lines. These transitions set up the distinct possibility that we could well see $1,500 gold.
With what is happening with the price of gold these past few days it is imperative to take a look at the long and short of it all. In doing so it shows that we are still very much in a long-term bull market but in a short-term bear market.
Gold is in the bump phase of a seven-year Bump-and-Run Reversal Top pattern which typically occurs when excessive speculation drives prices up steeply, and is now at a critical juncture which could change the long-term trend of gold.
Amid a tsunami of interest in the future prospects of gold and silver mining companies this article gives insights into the "secret world" of warrants and the make-up of two indices, identifying the constituents of each.
Last year a basket containing one each of the long-term commodity-related warrants went up 91% while their associated stocks "only" went up 57%. Warrants are priced about 60% less on average than their associated stocks.
Put all (or almost all) your investment eggs into a basket of precious metals, agricultural and energy assets, including a mix of bullion, individual stocks and/or their associated long-term warrants and ETFs.
History will look back at the artificially high gold:silver ratio of the past century as an anomaly, caused by the dollar bubble and the world being deceived into believing that fiat currencies are real money, when in fact they are all an illusion.
Analysis of the long-term relationships of gold with other assets shows that, in most instances, physical gold and silver and the shares of the companies that mine those metals have "truly major" upside potential in coming years.