Axstone's Gold Price Commentary

We are Nearing a Major Run Up in the Gold Price Similar to Early 1979

2008-09-03T13:43:00.000-07:00

Adjust the price of gold in terms of true inflation numbers, you get a figure north of $2,000 dollars today. However Golds second attempt at $1,000 resulted in a nasty stumble in the last couple months.

Is Gold in need of a long consolidation? I don't think so. I believe we are nearing a major run up in the gold price similar to early 1979.

If a 20 % correction in the gold price started under natural selling, I would believe it would be time for pause, perhaps many months (ie 6 -12 months) to consolidate before the market figures out what to do before it resumes its bull.

However since this sell off has been criticized as non legit with evidence of intervention followed with intense physical buying; this is not a sign of "TIME FOR PAUSE" but instead a rush to take advantage of a discount. This tells me the gold price could move substantially higher in the months ahead.

Precious Metals Manipulation: Lawyers Prepare for Battle

Don't Believe the Gold Price

2008-08-18T14:14:00.000-07:00

Is the bull market over for gold? Absolutely not, the linear trend line has not been broken on gold however, the parabolic trend line I am using has recently been challenged and briefly breached. However the shortages in the physical market tells me there is either soaring unexpected demand for physical gold (and silver) or a supply problem which leads me to believe the paper market is out of touch with reality.

A sharp correction in gold can lead to what many gold experts call a forced liquidation of the (highly leveraged) paper market. In my opinion there is no doubt the Gold Cartel gave it a little push on the down side.

This is yet another great time to dollar cost average:

Jim Sinclair reminds us why you don't speculate in Gold with leverage:

Chris W: You discussed the dangers of leverage in the precious metals markets while promoting cash investing, I want to give you a chance to talk about why.

JIM Sinclair: The majority of people couldn't stand what went on in the last month in gold, You know..they would see their life passing in front of their eyes, they would be terrified of their investments ...emotions would take them out where? Directly on the BOTTOM! -- UP it goes in they GO-- Before their finished they got no money so when you speak to many people you have a responsibility and the responsibility is sort of like don't yell fire in the theater. You don't have to have a ton of gold , A little goes a long way, Its an insurance policy.".... "GOLD IS INSURANCE when you start putting leverage on it you are a speculator...go speculate in GOOGLE, leave GOLD alone!"

Gold Price was the Alarm the middle Class needed.

2008-08-01T00:28:00.000-07:00

I put myself in the same school of thought with the GATA camp.. The supression of the Gold price basically silenced the inflation alarm. If this alarm had went off earlier perhaps Billions in mal investments could have been averted.

You can thank Policy makers and Central banks for cutting the wires on the alarm system.

Gold Price Set to Tackle $ 1,000 Once and For All

2008-07-21T23:08:00.000-07:00

The gold price is preparing to tackle the $1,000.00 mark once and for all, Three times should be a charm.

Watch the US dollar index, once the dollar breaks decisively below the 71 level the gold price should gather momentum to the upside.

On a technical note, the construction of a handle may be underway, a mini rounded bottom including the $940 area is very possible and would be very constructive for the gold price to surge through the 1,000 dollar mark.

Gold Price Got You Giddy?

2008-07-14T19:58:00.000-07:00

Were you a major buyer at $850? If you were not a buyer last month, you were not buying weakness, as you see the Gold Price has moved nicely off of $860 recently, that means gold has moved into the strength category; along with this comes giddiness. Keep the same game plan - Long Gold and accumulate on weakness, emotional control and money management. Many opinions are that the dollar may crash and the gold price could spike, however intervention is likely to prevent both from happening, and so far we have orderly moves. How long this will last, no one knows.

Here is a quote from Dan Norcini from (www.jsmineset.com):

"As you can see on the chart, gold broke into the resistance zone marked out on the chart and then managed to poke its head above that. The ability to hold above this level for another day would signal that a drive to $990 is underway. Expect a fierce battle should price move to that level. If gold does not stop and pause for a bit of a breather at that point, it could well signal that things are spiraling rapidly out of control."

Prepare for the worst, hope for the best.

Signs the Gold Price is About to Make a Transition

2008-06-26T21:17:00.001-07:00

Technical signs the GOLD PRICE is now entering a powerful bull move includes a break above a recent downtrend line accompanied by a higher low from the $850 low made during the first week of May. This breakout can be accompanied by a correction to around the nose (910) but then a powerful advance should be accompanied shortly after. I am looking for a powerful crossover in the MACD indicator.

This bull move could easily be one of the most powerful bull moves since Gold started its Bull Market phase back in the year 2000.

The GOLD PRICE, still way below its inflation adjusted value of $2,200.00 (minimum) may surprise many on how fast this gap may be closed as the realization that GOLD is becoming more of a currency and shedding some its identity as a commodity.

For a review of the GOLD STAGES: (Author Jim Sinclair) www.jsmineset.com

Note: Any failure for the dollar to find support @ 71.10 could ignite the gold price dramatically here:

Gold Price Accelerating vs Time?

2008-06-20T07:00:00.000-07:00

The trend for the gold price is obviously heating up. Last August when Central banks slashed rates and were willing to accept non performing OTC derivatives on their balance sheets to avoid a collapse of the financial system you knew the gold price was going to go parabolic.

As The Fed continues to monetize debt and flood the world with money, (M3 now hidden) I expect the gold price to continue its accelerating uptrend until it finds its inflation adjusted levels. For now I'm accumulating and sitting tight for a few years still before I sell any gold.

Gold Price Today is Truly a Golden Opportunity to Accumulate

2008-06-10T10:51:00.000-07:00

As I mentioned to Jim Sinclair today on www.jsmineset .com this has to be a golden opportunity to add to your bullion holdings.

I see a reverse head and shoulders in the making. This would make for a small bear trap of the trend line in orange which should make the fans of intervention very happy in the short term anyway!

Jim,

This has to be as good as it gets for those who didn’t have the courage to buy at $850, the point you told us many times was the end of the fishing line.

At $1,200 Gold we will look back at the Gold chart and realize this was a golden opportunity!

CIGA Alex

Note on the US DOLLAR INDEX,

I don't rule out short term intervention to bend the charts but I do rule out success on any long term basis.

Gold Price is Building its Platform for $1200 Target

2008-05-29T17:29:00.000-07:00

The GOLD PRICE is doing very necessary work that must be done in every bull market. That is to build a platform for the next higher high, without this you have straight line moves which everyone warns must not happen for a healthy bull market.

It's painful if you are a holder of gold and gold shares but it is totally necessary. The term parabolic comes to mind which scares the heck out of technicians if these corrections are not part of the bull market.

This work being done, creating a low after the correction a consolidation chopping pattern up and down is the foundation for a launch pad if you will to catapult the gold price to its next target or nominal higher high.

This action is perfect for our trip now to $ 1,250 and beyond.

French Curve Update:

The Flip Side to the Gold Price - The US Dollar Index

2008-05-22T11:57:00.000-07:00

Here is a chart of the US dollar against a basket of foreign currencies. The currency or the stock of the USA, measured against the stock of other countries. Is it a coincidence the Federal Government stopped publishing the amount of shares they were adding into circulation also known as M3.

It is no wonder that oil, commodities and precious metals which are finite items in supply show strength in terms of US dollars, when there are no limits to the quantity of US dollars issued into circulation. You can see with just unchanged demand the value of hard assets measured in US dollars must rise.

Gold however, is in the transition from a commodity/currency to strictly a currency. During the next leg down in the fiat US dollar, GOLD, I believe will start to regain its credibility as REAL MONEY among all generations once again.

Gold Price Uptrend Line is Sound

2008-05-15T07:14:00.000-07:00

Consider a 20 % pull back in oil from todays $125 Oil Price level. That leaves you with a $93 Oil Price. Now consider the historical GOLD/OIL ratio is 15 - 20, you can see Gold is very reasonably priced here. 16 times 93 gives you a $1,488 Gold Price.

My view is there is a possibility the world is coming to the realization that a $100 Oil Price and climbing is the new reality.

The Gold Price May Not Be Rising in a Straight Line

2008-05-09T12:30:00.000-07:00

The 70's are back! Is that what is being quoted in the Financial Press this week?

Well maybe the chart patterns for the gold price of the 70's are back too. I think they are.

Notice this is a logarithmic scale for the gold price and the silver price, and the trend line is not linear, that means a straight edge will not give you accurate support line for the price of gold or silver. This is important for investors and traders to consider because they need to know where to put new capital back to work on pull backs.

Jim Sinclair (bio) was the largest gold trader in the world in the 70's so I asked him what tool do we use when the straight edge no longer works. He suggested that I try a French Curve. Was I ever surprised, what a fit.

The French Curve shows a momentum change. If you need another example of how the momentum changed for gold in the past, just look at the 70's chart for the gold price. Good luck with your new technical tools you may need it with the gold and the gold shares in the future.

I am considering shortening my time frame for dollar cost averaging into Gold and Silver.

Don't let the Gold and Silver Price Take You Out

2008-05-01T19:22:00.000-07:00

Jesse Livermore said there were three key elements to success in a bull market, Timing, Money Management and Emotional Control.

Look closely at the silver price chart to the left, now without being emotionally involved visualize where the best places would be to buy silver over the past 7 years. Is it a the peaks where you feel most excited? NO, Is it a month after the silver price had a sharp sell off? YES

Now ask yourself is the BULL market over? if Yes, take your money and run , and DONT LOOK BACK. If However you feel we are entering into a highly inflationary time where all global currencies are FIAT and we have years left in the Bull Market to go, you are entering an ideal time to Buy Silver and Gold.

I have studied Jim Rogers, and Jim Sinclair for hours, they have done all dirty work on the fundamentals and their thesis is published for you to analyze. Conclusion BULL market in Precious metals are far from over.

What you don't want to do is put yourself in the position where you buy strength and sell weakness.

Jim Sinclair participated in a great interview with Chris Waltzek from Goldseek Radio.

Think carefully about this important message Jim makes.

Jim Sinclair 1:11 approx
http://radio.goldseek.com/

Chris W:
You discussed the dangers of leverage in the precious metals markets while promoting cash investing, I want to give you a chance to talk about why.

JIM S:
"The majority of people couldn't stand what went on in the last month in gold, You know..they would see their life passing in front of their eyes, they would be terrified of their investments ...emotions would take them out where? Directly on the BOTTOM! -- UP it goes in they GO-- Before their finished they got no money so when you speak to many people you have a responsibility and the responsibility is sort of like don't yell fire in the theater. You don't have to have a ton of gold , A little goes a long way, Its an insurance policy."....

"GOLD IS INSURANCE when you start putting leverage on it you are a speculator...go speculate in GOOGLE, leave GOLD alone!"

A very easy and fast way to Buy Gold and Silver Bullion Online.

The Gold Price Correction - Time to Focus on the Upside Now

2008-04-24T21:19:00.000-07:00

The GOLD PRICE has NOT topped out, so that means what we are currently experiencing is just a correction. Is the gold price correction over? Hard to tell.

I will give you a check list to consider, that I have looked at for evidence of a bottom forming in the gold price. However this isn't that important to me now, as I am more focused on the upside target since this is only a correction. Don't be so concerned about nailing THE BOTTOM. I am more interested in the next Cherub above $1,033, our previous high.

Conclusion. I am ready to focus on the upside now.

Notes on the HUI (a Gold Stock Index)

Gold Stocks can show signs of a bottom before the actual metal so I look at a group of gold stocks like the HUI index for clues of a bottoming process. Looks like an ABC correction here, with a possibility of 360 on the downside. I used a French curve to expire this correction. I was adding to some of my Gold Growth stocks today since my old fashioned target has always been to add on or near the RSI 30 level. I am almost always early, but, I never have a problem sitting on my buys. I DO NOT USE STOPS.
Check list for bottoming process

Trendline break .. check (good sign)
RSI 30 ...check (great place to add)
ABC formation in progress... Check (final process of a correction)
French curve... in process (exhaustion move)... check

Gold Price Intervention is Normal

2008-04-18T12:11:00.000-07:00

The GOLD PRICE broke a recent 1 week trend line, that made the short term traders nail the sell button all at once. The gold price moved nicely and gently down thirty dollars today. I believe this move down will not even show up on a 5 year chart.

Short term speculators that have no notion that there is an anxious intervention going on will pay the price and like Jim Sinclair says "may want to consider getting a cheaper hobby".

I stay with the plan that the intervention will not succeed in the long run and that the 4 week cycle will probably hold. The gold price low so far was put in just after a two week period during this correction.

It is not uncommon for a cycle low in this case the $880 level to be tested once again around the 4 week period but that did not happen today, the low was the $900 level today at the 4 week period . This to me is a bullish sign since it leaves the gold price with a higher low today. It is possible that consolidation could be extended with intervention and prolong the correction. I however will add to my long position in GOLD and my favorite gold shares early next week.

The "GATA Goes to Washington: Anyone Seen Our Gold?" conference in Washington, D.C., is on from Thursday, April 17, to Saturday, April 19, 2008.

GATA says in their full page ad published in The Wall Street Journal on Thursday, January 31, 2008:

"Gold's recent rise to $900 per ounce shows the price suppression scheme is faltering. When it is widely understood how central banks have been suppressing the gold, its price may rise to $3000 to $5000 or more."

Is the $1000 Gold Price Correction Over?

2008-04-08T08:56:00.000-07:00

Is the $1,000 Correction over? Conventional technical analysis tells me the correction is over or close to it with the break to the upside of the green down trend line. I also like to look carefully at the peak to bottom cycle period in the gold price which is nearly complete. Historically it has proven to be a 3-4 week cycle form peak to bottom. So now, enter the era of consolidation and the formation of a continuation Pattern, in other words UP AND DOWN sideways action. A retest of $880 or even a final low of $850 is possible on the downside but the more interesting move in my opinion is the $1,250 point on the upside.

In the 4 week period which is coming upon us I will be dollar cost averaging in physical Gold bullion and in an allocation form at Goldmoney.

$1000 Gold Price Hurdle

2008-03-27T11:42:00.001-07:00

The Gold Price has successfully touched the $1,000 gold price mark, where profit taking took place. Even though this market is still undervalued the round number $ 1,000 was a place to take a pause. The next step is consolidation, I expect tight consolidation to occur here. A typical up down consolidation. Three attempts at the $ 1,000 gold price and some time should put it behind us.

GOLD PRICE HITS $ 1,000 .. more to come ...

2008-03-13T16:58:00.001-07:00

Gold Price Stretching its Legs For the $1,000 Run

2008-03-12T06:54:00.000-07:00

Gold turned over around the $990 spot gold price, and has once again entered into a consolidation pattern all to familiar to gold. This is a nice pause to allow the gold price to nicely push through the $1,000 dollar mark.

This pause is very healthy for the gold price. What you don't want to see is a peak top where the gold price shoots up and and comes sharply downward like in May 2006. This tells me we still have a wave 5 run in gold to go, which could take the gold price significantly higher.

Remember to dollar cost average, technicals are a short term game, buy gold and let the bull market save you.

This quote is from Jesse Livermore, in the book Reminiscence of a Stock Operator:

"For instance, I had been bullish from the very start of a bull market, and I had backed my opinion by buying stocks. An advance followed, as I had clearly foreseen. So far, all very well. But what else did I do? Why, I listened to the elder statesmen and curbed my youthful impetuousness. I made up my mind to be wise carefully, conservatively. Everybody knew that the way to do that was to take profits and buy back your stocks on reactions. And that is precisely what I did, or rather what I tried to do; for I often took profits and waited for a reaction that never came. And I saw my stock go kitting up ten points more and I sitting there with my four-point profit safe in my conservative pocket. They say you never go broke taking profits. No, you don�t. But neither do you grow rich taking a four-point profit in a bull market.

I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling other customers, �Well, you know this is a bull market!� he really meant to tell them that the big money was not in the individual fluctuations but in the main movements - that is, not in reading the tape but in sizing up the entire market and its trend.

The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but also the intelligence and patience to sit tight.

Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market the game is to buy and hold until you believe the bull market is near its end."

Read more here

Dollar cost average on weakness is an excellent way to participate in the Gold
Bull Market..

$1,000 Gold Price is No Reason to Take Profits

2008-03-05T05:28:00.000-08:00

There is talk that a $1,000 gold price should be an area of resistance and time of profit taking.

You have to ask yourself when you read that (which is everywhere today) what kind of analysis is this?

What does a round number in US dollars have to do with a sound reason for taking profits in gold? Absolutely zero!

The US dollar is the common stock of the US whose balance sheet has gone wild. Gold sailed through the $500 level a few years ago rightly so, any resistance at $1,000 at this stage of the game is total nonsense and manipulation on several levels.

I have looked at over a dozen metrics and ratios that value Gold well north of $1,000 dollars today with a minimum of a $1,350 gold price today but we get stuck on the analysis of round numbers? This world is insane and is going where it deserves to go in my opinion.

I use technical analysis with GATA’s fundamentals so I feel very comfortable ignoring over bought areas in gold 90% of the time, I always have and always will until the evidence is overwhelming the Cartel has thrown in the towel.

Gold Price Making New Highs Pushing Off Trend Line

2008-02-28T15:29:00.000-08:00

The gold price failed to break the trend line and actually pushed off it. I suspected that if the Cartel could not break this trend line gold was going to soar.

The silver price never did correct and has had stellar gains catching up to the yellow metal and reducing the Gold Silver Ratio to 48. This is a super bullish sign, you never want to be out of a market this strong. The value here has to be the Gold and Silver Junior miners. The story in the media like CNBC is to short the gold stocksand go long gold. My contrarian view is if its in the media do the opposite. I think that trade was on and I think the shorts on the gold producers is over !
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I am looking at a handful of junior gold producers that have recently broken their down trends and I cant think of a better value in this industry than some of these junior gold stocks.
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Below is just one example of a junior gold stock that I like that has recently broken its downtrend.

When Will the Gold Price Correction End? Can Silver Give us a Clue?

2008-02-12T21:49:00.001-08:00

In my previous post on February 4th. I had a chart on gold that showed the possibility of a head n shoulder pattern formation in the making. It is a pattern that has always ended in a failed pattern with the result of the GOLD PRICE surging upwards in a shake out pattern [that's GOLD].

While the pattern is in development the bears come out of the woodwork and point to a drastic failure at the neckline and paint the image for a massive decline in the Gold Price. Then in their next newsletter they show how the gold price of course roared out of that pattern in a bullish fashion after the pattern failed, THATS a BULL MARKET. I expect nothing different this time.

What this means is , I expect this Head n Shoulder to fail at some point, with some scary moments for gold longs that watch every tick in the gold price.

Before we go further I want to recap an important message from Jim Sinclair (click for Jim's resume) that MARGIN IS A NO NO with anything GOLD with less than 25 years experience in trading.

Now with that behind us, I am looking for a tip to when the ultimate failure happens with respect to the Head n Shoulder pattern , for this I am looking to the silver price this time. I am looking for a reversal pattern in Silver in the coming weeks.

I know Silver is not considered money, I know Silver is an industrial metal, I know there is global slowdown talk, I know the GOLD SILVER ratio is very high (53 today) in historical terms.

With all that Said, I expect the silver price to consolidate here, and SILVER doesn't do it gently. Looking at the lack of follow through with the Silver shares, I expect that an intermediate top in silver today is in place, therefore were do we correct to.

The silver price typically retraces hard because of the small market cap it has, so unless you are from Mars you know the volatility with this one is the wildest. I could be wrong and Silver could lunge higher here to $19 or higher, but I don't count on it at this stage. ( I just don't) with the Gold Price down hard today and Platinum with a reversal in too, not to mention Palladium :(

So now that I have painted the picture for a hard correction for the silver price, where does it end and what to look for. I am going to look for two signals on the charts in the next three weeks, on a weekly closing chart for silver, I am going look for a long wick and a clear reversal pattern with silver. Second I am going to look for an RSI around the 40 mark which is a typical momentum indicator to touch at the end of a correction in a bull market.

The Gold Price technicals after strong $ 45 sell off

2008-02-04T14:53:00.001-08:00

Short term view, gold dropped off friday after hitting a new all time high. Two simple technical points to consider are the Trend line and pattern development; if we do not make new highs within the week we could be in the process of building a short term head n shoulder pattern where spin could lead to pressure on both the neckline in orange and the trend line in red. If these are violated I take the view it would be a great entry point to dollar cost average for a run to $ 1,050.

Gold Price has been the Star.. Silver is about to Shine

2008-01-31T07:10:00.001-08:00

Gold has been the star, but silver is about to shine. Silver has room to run here in its effort to reach its historical norm. Whether we hit the low GOLD SILVER ratio of 15:1 is yet to be seen but I believe this ratio will fall. As Gold moves towards 1,000 simple math of a gold silver ratio could easily move to 40:1 which would give you a Silver Price of $ 25.00.. So its not a stretch to see Silver move 8 dollars higher here going forward.

You can now add silver via Gold Money, I dollar cost average monthly by adding to my account.

Gold Price target hasnt changed... The platform has

2008-01-28T11:33:00.001-08:00

I need to quote Jim Sinclair here today. In doing so we are riding on the shoulders of a Giant in the gold market:

Gold is being influenced now by the magnet at $1,050 pulling from the front. Sellers exist at $950 to $960. The breaching of the $887.50 level multiple times as the gold price gyrated back and forth before reaching its present historic high is quite important.

Jim Sinclair
www.jsmineset.com