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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

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The magnificent gold price rally has paused in the $1300 area for the past few weeks. Monday was COMEX option expiry day.
With that now out of the way, gold is already staging more upside action!
Please click here now. Double-click to enlarge this daily gold chart. A bullish upside channel breakout is in play and the consolidation was a flag-like pattern.
Also, note my key 14,7,7 series Stochastics oscillator at the bottom of the chart. A buy signal that occurs in the 40-60 area is a momentum-oriented signal, as opposed to a value-oriented signal that occurs in the 0-20 area.
These are technical signs of a tremendously healthy market.
Please click here now. Double-click to enlarge this spectacular long term gold chart.
The technical excellence being showcased on the daily gold chart is typical during rallies from the final right shoulder low in this type of enormous inverse H&S bull continuation pattern.
I’ve been almost alone amongst gold analysts in suggesting that the brief five-year decline from 2011-2016 was a typical “ho hum” correction in a bull market rather than a “vicious bear market”.
There’s no question that junior gold stocks experienced a bear market then, but they have experienced a myriad of bear markets since the gold bullion bull market began in 1999-2002.
Gold bullion bull and bear cycles last a long time. Twenty years is a short period of time for a gold bull or bear market, and many last a century or longer.
I’ve predicted that this bull market will last a minimum of a hundred years, and more likely two hundred, and I stand by that prediction without wavering.
Most of the world has been in a deflationary cycle since 1980. That’s when global bond yields peaked. Gold stocks tend to crash repeatedly in a deflationary cycle along with stock markets.
In an inflationary cycle, gold stocks rally when stock markets rally… and they rally when stock markets fall. In August of 2018 I told investors to get ready for a sea change event; I predicted global stocks would crash in September-October, and gold stocks would surge higher as the stock markets crashed.
That’s exactly what happened then, and I’ll calmly predict that it’s going to keep happening for the next decade of time.
Please click here now. Double-click to enlarge. Silver bullion’s daily chart looks fabulous.
There’s a double bottom pattern in play with a solid breakout. Note how the pullback stopped well above the $15 support zone. That’s another sign of a very healthy precious metals market.
Key bank analysts are tuning into the solid fundamentals picture for silver. “Supply growth has started to slow, more than for any other precious metal.” – John LaForge, Wells Fargo Bank, Jan 28, 2019.
Unlike America, China has tremendous “wiggle room” to stimulate its economy. GDP growth can likely be sustained at 4%-6% for many years, while it’s likely to be sub 2% in America for a long time. That bodes well for industrial silver demand, and Bloomberg analysts predict that demand will rise by 50% over the next 4-5 years!
India is in an even stronger position than China, and vastly stronger than America. GDP growth is almost 8% now. It could rise above 10% and it probably needs to, to provide jobs for all the young citizens entering the workforce every day.
Please click here now. Double-click to enlarge this silver stocks ETF chart. SIL is lagging GDX right now, and that’s technically positive; silver tends to lead as intermediate trends end, and lag as they begin and accelerate.
Goldman’s analysts feel the global GDP and earnings decline in play now will hurt silver demand, but I think they are underestimating the ability of the Chinese government to stimulate.
They are also underestimating the anger of American blue-collar workers who were essentially deflated (and arguably conned) by the central bank with its QE program. QE benefitted the banks, the stock market, and government.
Blue-collar Americans wanted tax cuts. Corporations got a tax cut and the workers got nothing. Now they want their own version of QE handouts, in the form of wage hikes. Those hikes are going to happen as America enters a long period of GDP and corporate earnings stagnation. That’s phenomenal news for silver stock and bullion investors!
Please click here now. Double-click to enlarge this GDX daily chart. Volume is positive, and the month-long consolidation appears to be ending. A gold-positive statement from the Fed today should move GDX like a shooting star towards my next $23 target price!

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “GDXJ Stars In The Sky!” report. I highlight key intermediate producers in the GDXJ ETF, with historical and current buy and sell points for eager traders and investors!

Stewart Thomson

Graceland Updates

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

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Is the price correction in gold already over?
Please click here now. Double-click to enlarge. I told investors to prepare for a modest and healthy correction from the $1300 area, and that’s happened.
Gold hasn’t even reached the first Fibonacci retracement line after staging a magnificent rally from the $1173 area. That’s a sign of immense technical strength.
Please click here now. Double-click to enlarge. Silver has carved out a beautiful double bottom pattern. It’s now staging a textbook pullback to the neckline of that pattern.
Whether the precious metals market correction is over or has a bit further to go is not important. What matters is the fundamental picture. That picture is healthy, and it’s about to get exponentially healthier.
Please click here now. The odds of an import tax cut in the world’s most important gold market are higher now than at any point since the taxes were ramped up in 2012-2013.
“You need the Indians to buy oil or gold.” – Jeff Currie, Global Head of Commodities Research, Goldman Sachs, Jan 16, 2019. Jeff says, “Buy commodities.”
While senior citizens in the Western gold community may long for what is essentially a remake of the 1970s fear trade oriented gold market, today’s gold market is mainly about the rise of gold as a respected asset class. That’s being created by the ongoing rise of China and India as economic titans.
Today’s Western fear trade for gold is more like icing on that cake than the centre stage price driver that it was in the 1970s.
In a nutshell, a “goldaholic army” of three billion Chindian citizens is becoming wealthier at a very fast pace. That’s creating annual gold demand growth of 6%-8% that is essentially relentless. Mine supply can’t seem to grow more than 2%.
It’s becoming a “no-brainer” that the gold price will rise consistently for decades to come, and probably for the next two centuries.
The current price correction in gold is likely almost entirely due to the actions of Indian dealers operating on both China’s SGE and in Mumbai. They are in “quiet mode” ahead of the February budget that is expected to bring a significant cut in the import tax.
In their eyes, there’s simply no point buying gold now when they can likely get it 5% cheaper in just a few weeks. Also, a duty cut would create a positive vibe amongst Indian citizens similar to the vibe created by Donald Trump’s MAGA program.
The “minor” difference, of course, is that India is an gold-oriented emerging empire with the best citizen demographics and strongest GDP growth in the world. The bottom line: The current price correction in gold is probably the healthiest and most stable since the price corrections of 2003-2004.
While today’s gold cake is Chindian, the icing is pretty tasty too. On that note, please click here now. Only 37% of America’s business leaders are optimistic. Top bank economists almost universally predict U.S. corporate earnings growth will fade from the 20%+ level to single digits and GDP will slide towards 1% by year-end.
My recommendation for stock market investors is to focus on my short term guswinger.com signals for UDOW and SDOW while waiting for a major US business cycle trough. Once the trough happens (years from now) investors can begin accumulating big name US stocks using my unique pyramid generator to gracefully tranche into the market.
US politicians promise citizens and corporations that enormous tariff taxes will “Make ‘Em Great”. This, while US blue collar workers are struggling with wages that are still below 1968 levels in real terms. These workers don’t need walls around an entitlements-themed ecosystem. They need serious tax cuts (all the way to zero) and they are just not happening.
A single corporate tax cut to only the 20% level is not enough to make America great again, especially when there’s no corresponding chop in the size of government. Income tax, property tax, and capital gains tax need to be eliminated and replaced with a goods/service and financial transaction tax. That would reduce the size of the government dramatically and bring trillions of investment dollars roaring into the country.
America could easily become a super-sized version of Switzerland, but in the eyes of its biggest hedge fund manager Ray Dalio, the country is instead staging an almost macabre debt-obsessed dance that ends with: Inflationary depression!
America’s terrible population demographics and entitlements-oriented society are a giant drag on long term GDP growth. Business leaders know they can’t supply the government and the entitlements-obsessed citizens with anywhere near the amount of capital required to maintain this bizarre system.
That’s spurring U.S. institutional interest in gold, and it’s happening as India’s government is about to follow China’s lead and endorse gold as a respected asset class.
Gold is becoming an asset class like stocks and real estate that is not owned as a market “hedge” but for long term capital appreciation.
Please click here now. Western institutional money has flowed into the key SPDR gold bullion ETF as the price has softly corrected from the $1300. That’s another sign of a very healthy market.
Please click here now. Double-click to enlarge. As with gold, the correction in most gold stocks could be over! Note the bull wedge in play and the soft volume on the recent price decline. Now there’s a spike in volume and that could mark the end of price softness. A sell-off in the US stock market seems imminent, and I told gold stock enthusiasts in August to expect solid action from GDX in a stock market meltdown. That’s exactly what transpired… and the same thing is likely about to happen again!

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Senior Gold Stock Superstars!” report. I highlight ten senior gold stocks that are poised to benefit from even a small gold price rally. I include key buy and sell tactics for both traders and investors!

Stewart Thomson

Graceland Updates

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“Some analysts believe China could deliver 2 trillion yuan ($296.21 billion) worth of cuts in taxes and fees, and allow local governments to issue another 2 trillion yuan in special bonds largely used to fund key projects.” – CNBC News, Jan 15, 2019.
China’s economy is likely to grow in the 6.2%-6.5% range for 2019 and the stimulus is inflationary. While that growth is the slowest pace in almost thirty years, it’s still “head and shoulders” above the horrifying meltdown in growth that the United States is likely about to experience.
Please click here now. Goldman is predicting a meltdown in U.S. earnings growth from 20%+ in 2018 to just 3% to 6% for 2019!
Goldman’s heavyweight analysts are also predicting that US GDP growth melts towards 1% by the third quarter of this year. This, while Morgan Stanley is predicting an “earnings recession”.
Germany’s economy is already slipping towards 1% GDP growth and EU earnings are unlikely to grow more 5% in 2019.
Interestingly, most big bank economists are predicting an uptick in inflation will accompany the slide in Western earnings and GDP growth. Clearly, all roads lead to…gold!
On that note, please click here now. Double-click to enlarge. Gold continues to perform remarkably well at a time when a substantial pullback would be expected.
Conspiracy buffs are waiting for the “banksters” to smash the gold price. Where is the smash? Well, it doesn’t exist. All that’s happening is mild consolidation.
A pullback to key Fibonacci retracement lines in the $1250-$1260 area would be healthy but even that may not happen. Current technical action indicates a very healthy gold market.
Please click here now. Gold has raced to an all-time high against the Australian dollar. There’s a loose triangle pattern in play. The target of that pattern is well above $2000.
It’s very important for gold stock enthusiasts to make some effort to own at least a few Australian gold stocks that trade on Australian markets. Many of these stocks have been in powerful uptrends for years and are likely in a new acceleration phase.
Gold is also doing well against the British Pound and the Cbone (Canadian dollar). Most of the world’s gold stocks trade on the Canadian stock market and a lot of them are beginning to show good technical action.
Please click here now. Double-click to enlarge. The paint is barely dry on the Barrick-Rangold merger, and now Newmont is buying Goldcorp!
When mergers or takeovers happen, I like to see the new entity prove itself technically, with momentum. In the case of Barrick (GOLD-NYSE), I’ve suggested that investors need to see a weekly close of $14 for that to happen.
For Newmont, I need to see a weekly close of $36. That would suggest institutional money managers are endorsing the new entity. Once that happens I would be a buyer of every dollar of price weakness in the stock.
Both Barrick and Newmont are key GDX components. I’m impressed with the relative strength of GDX in the face of the softness in both those stocks.
Please click here now. Double-click to enlarge. While GDX “should” pull back to about $20 from the current price zone, the technical action is superb.
Note the fade in volume as price drifts sideways in the $21.50 resistance area. That’s extremely positive. Eager accumulators should be buyers of every ten cents of price weakness between $21 and $20.
Once the current consolidation ends, I’m anticipating a surge to the $23 price area… on strengthening volume.
Goldman’s influential gold market analyst Jeff Currie has a new $1425 target for gold in 2019. That’s an important number, because most gold and silver miners have made a significant effort to reduce their AISC (all-in sustaining cost) numbers.
A gold price in the $1400+ area would turn many of these companies into “cash cows”… and do so at a time when most companies in America face an earnings and revenue meltdown.
An institutional stampede into gold stocks in this new and emerging situation is not a pipe dream. It’s becoming more of a probable event than just a potential scenario.
Please click here now. Double-click to enlarge. My weekly gold chart shows that $1300 resistance is merely a pitstop on the road to the inverse H&S bottom neckline at about $1392.
If Goldman’s $1425 target price is achieved in 2019, it would mean gold has traded well above the neckline, ushering in a new target zone of about $1750. That $1750 price would turn most gold miners into not just cash cows, but cash cow superstars!

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Golden Sweet Spot” report. I highlight six gold stocks trading the $3 to $7 price range that give investors an ideal mix of managed risk and potentially enormous reward! I include key buy and sell points for each stock.

Stewart Thomson

Graceland Updates

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January 8, 2019

It’s time for the queen of assets to rest and consolidate. Nothing goes up in a straight line, and that’s certainly true for gold!
Please click here now. Double-click to enlarge this daily gold chart.
A pullback to about $1250 would be a healthy 50% retracement of the $100 rally from $1200 to $1300.
Gold begins 2019 with some very positive news in play. Please click here now. After a two-year hiatus, China’s central bank is back in gold market action!
The bank had been consistently buying about 15-20 tons of gold a month. When those purchases are added to buying from Russia and other central banks, they are quite price-supportive.
It’s great to see China back on the buy, and analysts in India are projecting a ramp-up in gold imports there of about 20% for the first six months of 2019.
The ECB (Europe’s central bank) is projecting higher inflation and easing growth for 2019.
The love trade is healthy, the central bank trade is healthy, and global stock markets are on the rocks.
On that note, please click here now. Double-click to enlarge. I’m a bit worried that the US stock market rally could peter out quickly.
Please click here now. Institutional money managers are cutting back their allocations to US equities, and rightly so.
The business cycle is entering the eighth and ninth innings, wage inflation is poised to spike in full-time jobs, and earnings have clearly plateaued.
Please click here now. China’s central bank and government have vastly more “wiggle room” than America’s do to stimulate the economy.
China’s stimulus is inflationary, and that’s good news for gold.
The U.S. government is shut down. That’s not a position of strength, to put it mildly. These shutdowns have happened so many times that citizens are now numb and don’t seem to care.
It’s not a good thing; the government just can’t seem to break its addiction to borrowing more and more money.
The U.S. government has been very vocal in its opposition to the modest interest rate rates from the Fed. I don’t see any economic stress from these hikes, and senior citizens have been paid nothing in their savings accounts for years.
Rate hikes are an indicator that inflation is in the air. They haven’t hurt gold, they help senior citizens, and they put pressure on banks to make business loans rather than finance stock market buybacks to enrich corporate directors.
Rate hikes do put pressure on the ability of the U.S. government to borrow ever-more money, and that pressure is good.
Please click here now. Double-click to enlarge this daily silver chart.
The uptrend is solid. A pullback is normal, expected, and healthy. Note the Fibonacci lines in play around the demand line of the uptrend channel.
Silver feels almost as solid as gold does right now, and that’s likely due to the growing threat of stagflation throughout much of the world.
Please click here now. Double-click to enlarge this nice GDX daily chart.
Like most sectors of the precious metals asset class, GDX is taking a breather after it successfully penetrated key resistance in the $20.70 area.
From a technical perspective, the range trade in the $20-$21.50 area has a 67% chance of being resolved with a rally to $23. The current consolidation could be the last opportunity for excited investors to buy in this price zone before GDX moves above $23 and stays there for quite a long period of time!

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Silver Stocks Rock!” report. I highlight the SIL and SILJ ETF component stocks that are poised to enter January like silver bullets shot out of a golden gun! I include key tactics to keep investors on the winning side of the action… in both the short and long term!

Thanks!

Stewart Thomson

Graceland Updates

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As the new year begins, gold continues to gain respect as the ultimate investment asset. Unfortunately, the same cannot be said for the U.S. dollar.
Most investors tend to view the dollar as a “safe haven”, but the big bank FOREX traders that really move the currency market view the dollar as a risk-on asset class.
They view gold and the Japanese yen as the main risk-off assets. So, when the dollar falls against the yen and gold as the U.S. stock market rises, all may not be quite as well as investors think it is!
Please click here now: http://www.graceland-updates.com/images/stories/19jan/2019jan1usd1.png Double-click to enlarge. After building an immense sloping H&S top pattern, the dollar has collapsed against the yen and is now almost in “free fall”.
That top pattern is technically a “head and shoulders (top) bear consolidation pattern”, and its implications are ominous.
At my guswinger.com swing trade service (where I personally take all the trades myself), I’m short the dollar versus the yen (and short the dollar versus the yuan) in the FOREX market. Traders are making solid profits on these anti-dollar trades.
We’re also long NUGT and Barrick. With John Thornton and Mark Bristow at Barrick’s helm, I now have a $200 long-term price target for Barrick. The NYSE stock symbol is set to change from ABX to GOLD tomorrow, and that’s positive news.
Please click here now: http://www.graceland-updates.com/images/stories/19jan/2018jan1gold1.png Double-click to enlarge. As 2019 begins, investors need to think hard about whether it’s more important to predict a late cycle rally for the US stock market… or a much better idea to focus on the spectacularly bullish price action taking place on the long-term gold chart.
India’s government is launching a new pro-gold policy within a few weeks. That will see gold become endorsed as a respected investment asset class by the government. A significant chop in the import duty will likely follow, and discussions are already underway with Russian entities about duty-free imports.
In America, the current collapse in the dollar comes late in the business cycle. The big bank FOREX departments are almost universally negative on the dollar, and rightly so.
Please click here now: http://www.graceland-updates.com/images/stories/19jan/2019jan1dow1.png Double-click to enlarge. The dollar melt-down against the yen is happening as the US stock market trades lower on ramped-up quantitative tightening that Fed chair Powell now says is on “auto pilot”. Investors who ignore quantitative tightening in the late stage of the US business cycle are making as big a mistake as ignoring quantitative easing at the 2009 trough of the cycle.
Also, a Dow Theory sell signal could take place in 2019 if both the Transports and the Industrials cannot make new daily closing highs… and then break the current lows.
I’m long the Dow now via UDOW but that’s just a technical swing trade, albeit a winner already. In the big picture, investors need to think about only one thing in 2019 and that is…
While the job market is officially very tight, a lot of that tightness can be explained by the large number of part-time jobs. The labour department counts one worker working two part-time jobs as two people working. That’s arguably fraudulent accounting. Regardless, the huge number of part-time jobs is the main cause of the slow growth in wage inflation.
Having said that, as the full-time jobs market tightens significantly in 2019, much more wage inflation will appear… and it will do so as corporate earnings fade towards the single digits growth range.
In a nutshell: Welcome America, to the rebirth of… Stagflation!
I’ve predicted that investors are making a mistake if they sit around and wait for Trump to “make things great” while the U.S. government debt rises ever-higher in the late stage of the business cycle. It’s an understandable mistake that comes from frustration with the hideous socialist and war-mongering policies of past U.S. administrations. The murderous war-mongering has been financed with gargantuan debt, making it even more vile.
Regardless, the much wiser plan of action is to use Trump’s incredible work ethic and business acumen as personal inspiration to take professional action in the gold and silver market.
On that note, please click here now: http://www.graceland-updates.com/images/stories/19jan/2019jan1si1.png Double-click to enlarge this awesome silver chart. I wanted to see a three-day close over $15.20, a Friday close over that same price, and I also hoped to see that “cake” iced with a 2018 year-end close above $15.20.
All three technical events occurred! While the short-term target is the decent price area at $16, I am projecting much higher prices over the 2019-2022 time frame. It’s important that all precious metals investors understand that while gold soared above its 1980 high in 2010-2011, silver barely made it back to its 1980 high of about $50. That’s because the world has been in a general deflationary (lower rates) cycle since about 1980.
Now, stagflation and higher rates over the long-term (like occurred in America in 1966 -1980) is beginning. When silver barely made it back to its 1980 high after 30 years, the price action was not “parabolic” like it was in the late 1970s. It was more of a modest blip related to gold dragging silver modestly higher in an overall risk-off play. What’s coming for silver now is much different than what happened in 2011. It will be parabolic (as stagflation reaches a crescendo, years from now), but it’s only barely beginning.
Please click here now: http://www.graceland-updates.com/images/stories/19jan/2018jan1gdx1.png Double-click to enlarge. I’ve boldly referred to GDX as “Prince of Assets GDX” and called the entire $23 – $18 price zone the most important investor accumulation zone in the history of markets.
With maverick money managers like Ray Dalio calling for a U.S. inflationary depression while amateur investors try to gamble on the late stage of the stock market cycle, I predict there’s a 90% chance that I’m proven correct.
On this GDX chart, I’d like investors to note the bullish action, the enormous volume, and also take a close look at the $21.67 resistance area that GDX has already closed above repeatedly since arriving there. All the price action is positive, and it’s poised to become much more positive as January trading gets underway. Perhaps I should let “Queen Gold” and “King Silver” have the final word as 2019 begins, which is: Happy New Year to the entire world gold community!

Stewart Thomson

Graceland Updates

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Weary investors who endured the September and October stock market “crash season” felt they should be richly rewarded for their incredible patience… with a wondrous Santa Claus rally

Please click here now. The traditional Santa Claus rally has morphed into a hideous Santa Claws mauling of millions of US stock market price chasers. It’s a gruesome sight. The good news, clearly, is that my prediction has come true and both gold and senior miners have leaped into the limelight.

They are happily basking in their new role as safe haven beacons of safety for smart money investors. Please click here now. Double-click to enlarge this “Queen of Assets” gold chart.

While the stock market incinerates, gold is in a mighty uptrend. Note the fabulous flat line event taking place now on my 14,7,7 Stochastics oscillator at the bottom of the chart. This type of technical action is extremely positive. The world’s mightiest metal is poised to surge above the uptrend channel supply line and roar straight to my $1300 target price zone!

Please click here now. Double-click to enlarge. Silver has held its own against the dollar and higher price enthusiasts will likely get the rally they deserve in 2019. Because silver is used extensively in industrial applications, it tends to lag gold as the business cycle peaks. Demoralized stock market investors don’t see signs of aggressive growth in inflation yet, so they leave silver alone.

Once inflation begins to pick up more aggressively and US GDP growth contracts more substantially, silver will start to rally as aggressively as gold and the senior miners are rallying now.

I see that happening by the second half of 2019, but a three-day close over $15.20 would be a strong indication that commercial traders anticipate stagflation and are getting invested in this superb metal ahead of time.

As 2018 got underway, I urged investors to focus on President Trump’s success in the private sector and use his fabulous work ethic, organization, and planning skills as an inspiration to act professionally in the major markets.

Unfortunately, many investors believed that Trump’s power as president gave them a free pass to act unprofessionally in the major markets.

They believed the incredible success that America achieved in the 1880s “Golden Age” and the 1950s could be re-created by Trump… even though America’s demographics are now essentially the opposite of what they were in those two glorious time frames.

These investors essentially devolved into maniacal US stock market price chasers, and they ignored the clear “safehavenization” of senior gold stocks that was taking place.

The bottom line: Investors will always pay a price for sloppy actions in the market and they will always reap incredible rewards for high-level professionalism.

Please click here now. Double-click to enlarge. I developed the STL (Stewart’s Traffic Lights) system to provide clear green and amber light signals for an array of assets over both the short and long term.

Horrifically, the Dow Jones Industrial Average is now flashing a weekly chart amber STL. Amateur investors like to “wait for a rally” to sell. I like to obey traffic lights.

If the light turns amber, I don’t race my stock market car through the intersection, especially when a quantitative tightening freight train on central bank “auto pilot” is barrelling through that intersection. I don’t predict when the STL will turn green. I wait for it to turn green, and then I buy.

At my guswinger.com swing trade service, I have the “party people” short USD versus the yen, long GDX via triple-leveraged NUGT, and short the stock market via SDOW. It’s certainly a very Merry Christmas today for all the GU Swinger partygoers!

This year, America awakes on Christmas day with the socialist “demorats” back in control of the House, the stock market on a major sell signal… and with gold and the senior miners acting like the brightest Christmas lights in town!

Please click here now. Double-click this superb GDX “chart of champions”. As the Dow tumbled 600 points, GDX surged above the $21 resistance zone on a closing basis!

Note the enormous rise in volume. There’s also a flat line event taking place with the Stochastics oscillator. From a technical perspective, this chart is a bullish masterpiece that looks like Michelangelo created it.

Santa Claws came to U.S. stock market town, but Santa Claus came down every gold bug’s chimney with wondrous higher priced gold and senior miner tidings! Enjoy! Enjoy, because the current market themes in play are poised to dramatically accelerate in 2019. Best wishes to the entire global community!

Stewart Thomson

Graceland Updates

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stewart@gracelandupdates.com

stewart@gracelandjuniors.com

stewart@guswinger.com

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The U.S. stock market continues to implode. At the same time, precious metals, bitcoin, and the Indian stock market are acting as superb safe havens.
Please click here now. Double-click to enlarge this great short term gold chart.
Note the positive bounce from buy-side support at $1237, and the inverse H&S bottom pattern. A fresh rate hike from the Fed tomorrow could crush the stock market again, but if there’s no rate hike, that could also crash the stock market.
That’s because money managers would believe the Fed thinks the supposed “world growth leader” economy is too weak to handle even a 2.5% Fed funds rate!
This Fed meeting could be an important catalyst that makes institutional money managers start to get serious about viewing gold as a respected asset class… that is here to stay.
On that note, please click here now. While an overdue import duty cut remains elusive, the citizens of India (and China) are the clear leaders in the quest to make gold the world’s most respected asset class.
On the government side, the Chinese government has been a leader in building gold market infrastructure to move price discovery from the dingy trading rooms of the Western fear trade to the more positive love trade environment of the East.
The Indian government is beginning to play “catch-up”, and that’s very good news for gold investors around the world.
Please click here now. There are currently about 400 million Indians who have internet access, and that is expected to double to 800 million quite quickly.
The World Gold Council (WGC) estimates that 3 million Indians buy gold online, and they predict that number will soon quintuple to 15 million!
In 2014 I predicted a “gold bull era” was being born and it would be founded on a gargantuan ramp-up in Chindian online gold demand.
Indians can already get physical delivery from most of the online platforms when total purchases reach just one gram of online-purchased gold.
Warren Buffett is buying into one of the platforms (Paytm). This man is an elephant hunter!
Please click here now. Double-click to enlarge this magnificent big picture gold chart.
An almost surreal array of positive love trade and inflation trade price drivers are converging at the same time.
This is happening as gold bullion begins a majestic ascent from the right shoulder low of a gargantuan inverse head and shoulders bull continuation pattern.
Sadly, to view something much less than majestic, please click here now. Double-click to enlarge. My proprietary “Graceland Traffic Light” on the weekly Dow chart has just turned amber.
This is a rare and ominous event. U.S. stock market investors who ignore these major traffic light signals risk tremendous portfolio damage.
If the signal stays amber as of Friday’s close, I’ll consider it a full U.S. stock market sell signal, and any positions bought above the Dow 10,000 level should be sold.
In global stock market downturns like the current one, Canadian money managers will throw the junior mining stocks baby out with the stock market bathwater.
Most of the smaller junior miners trade on the Canadian CDNX exchange, so it’s very important for all gold market investors to be properly diversified in what is obviously the world’s greatest asset class. Junior mining stock investors should own some of the bigger miners to get that diversification.
Please click here now. Double-click to enlarge this spectacular GDX chart. GDX put in another day of strong upside action yesterday, and it did so as the Dow fell almost 500 points!
On Saturday I urged my gublockchain.com subscribers to buy bitcoin (and some “alts”)… right before the latest upside blast that I predicted would be “explosive”. It was explosive, and I have the excited investors in profit booking mode now.
I’ll boldly predict that a few more daily closes above $20.50 are going to produce an equally explosive price surge for GDX and a huge array of individual gold stocks!

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Juniors With The Juice!” report. While most junior miners have a lot of hurdles to overcome, I highlight six that are likely poised for five bagger gains in 2019! I include daily chart buy and sell points for each stock.

Stewart Thomson

Graceland Updates

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Are You Prepared?

Where are the populist government leaders who are cutting their outrageous government debts?
The answer, unfortunately, is that they do not exist.
Citizens riot in France over insane fuel taxes, central bankers resign in India, markets crash in America, and England’s citizens watch their Brexit turn into an overpriced wet noodle.
None of this fazes the world’s populist leaders. They believe they alone can fix what debt broke… with more debt!
Please click here now. Double-click to enlarge. In the middle of all the mayhem and madness, the uncrowned queen of the world, gold bullion, sits cooler than a cucumber. Gold is showcasing a nice steady uptrend on this medium-term price chart.
Please click here now. Heavyweight analysts at JP Morgan, Goldman, Wells Fargo, and other big banks are bullish on gold now, but many amateur analysts and investors are worried (with some sounding outright terrified) that gold is going lower.
This is a classic wall of worry rally, and I expect the upside price action to accelerate in January and February.
There’s also a real possibility that Trump piles on more destructive tariffs by March. If that happens, it would occur just as Chinese New Year gold buying really accelerates.
In that scenario, gold could surge towards the key $1400 area and the US stock market would likely crash like it did in 1929.
Please click here now. Double-click to enlarge. Investors must keep their eye on the big picture, which is all about the growth of the Chindian love trade and the rise of inflation, especially in the West.
A new pillar of gold bullion demand could also emerge now that India’s populist leader (Modi) has essentially taken control of the nation’s central bank. A fresh survey shows that 90% of Indian households see substantially higher inflation coming in 2019. That survey was done before the nation’s top central banker resigned yesterday!
The world’s populist leaders want interest rates to stop rising so their governments can borrow even more money and waste it on silly “people helper” programs.
Some of the populist leaders want to buy more bombs, some want more welfare programs, but what they all have in common is they want to spend more, and more, and more! This is highly inflationary.
Please click here now. While many amateur gold analysts have talked about their fear of lower prices, I’ve urged investors to focus on the epic upside breakout taking place on the world’s most important gold mining company. That company is: Barrick.
Junior gold and silver stock enthusiasts can expect to see their stocks begin to follow the Barrick leader. It’s already happening with many of the CDNX-listed stocks, and this morning’s pre-market “super surge” in Barrick’s price is going to start the next major wave higher for most of the junior miners.
What seals the deal? Answer: A weekly close above $14 for Barrick. I expect it to happen this week and investors who waste time reading the fears of the gold bears risk missing out on years of upside price action. The bottom line:
This is not the start of a gold bull market. It’s the start of a bull era that will last a hundred years.
I’ve predicted three U.S. rate hikes for 2019. Goldman was predicting four, but yesterday their chief economist Jay Hatzius reduced his forecast to three.
We’re on the same page now, with both of us predicting three hikes, a surprising rise in U.S. inflation, and GDP growth that fades under the 2% marker by the second half of 2019.
Ray Dalio is head of the world’s largest hedge fund (Bridgewater). Ray predicts an “inflationary depression” will envelop America within about two years. I think it takes three to four years, but given the danger, does the time frame really matter? The timing of a hurricane doesn’t change the fact that people need to get out of its way.
On that note, please click here now. Just as most big bank analysts are positive about gold now, they have increasingly negative forecasts for the U.S. dollar.
The policies of the world’s “spendaholic” populist leaders are extremely inflationary. The bank analysts know that’s bad news for dollar bugs and great news for gold stock investors.
Please click here now. Double-click to enlarge this magnificent GDX price chart. My short term guswinger.com swing trading service has caught all the key swings in the GDX base formation, reducing boredom while making investors richer! I focus on NUGT and DUST for the short term moves and unleveraged GDX for the home run plays!
We booked solid profits yesterday as GDX edged towards the important $20.50 price zone. After a brief pitstop at this minor resistance zone, the GDX bull is poised to drive its golden horns into the bears… and begin a magnificent charge up to $23.50!

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Golden Outperformers” report. I highlight six GDXJ component stocks that are poised to immediately follow Barrick with major upside breakouts of their own! I highlight key technical signals and provide tactics to help investors book great profits.

Stewart Thomson

Graceland Updates

Written between 4am-7am. 5-6 issues per week. Emailed at aprox 9am daily.

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December 4, 2018

The double bottom is the world’s most stressful chart pattern. It forms after a significant price decline. The first low in the pattern creates substantial panic and fear in most investors.
The second low in the pattern is “softer”, but no less dangerous to emotionally vulnerable investors. The volume is generally weak and the price action makes investors feel like they are in some kind of financial gulag.
Then the sun bursts out from behind those financial clouds, and glorious upside action begins! On that fabulous note, please click here now. Double-click to enlarge the spectacular price action on this daily gold chart.
The long term fundamentals and liquidity flows for gold should never be confused with the medium or short term. In the long term, the biggest driver of gold price appreciation is the Chindian “wealth effect”.
It’s all about Chinese and Indian citizens growing their standard of living and buying ever-more gold to celebrate the good times.
In the West, inflation is the most potent driver of the gold price and America is beginning an enormous inflation cycle that will likely continue for fifteen to twenty years.
As Chindians bring respect to gold as an asset class, Western gold bugs won’t need to hide in the closet when they buy it because everybody will be able to get it online from companies like Amazon.
It will be as mundane as buying a coffee at Starbucks is now, but much more profitable!
In a nutshell, the love trade of three billion Chindians combined with the inflation trade of at least 500 million Westerners will soon completely restore gold’s shimmer and place as the ultimate asset.
Please click here now. Double-click to enlarge. All investors should keep their eye on the price action taking place on this long term gold chart. Note the RSI oscillator. It’s poised to leap above 50 and that’s in sync with the arrival of Chinese New Year seasonality.
Some heavyweight money managers believe that an inflationary surprise is coming to America, and it could happen as early as this Friday’s jobs report.
On that very interesting note, please click here now. Double-click to enlarge. A surprising uptick in US wage inflation is imminent and it will be a tremendous tail wind for silver’s upside price action. I don’t know if that inflationary surprise happens in Friday’s jobs report or not, but I do want investors to be positioned to get richer if it occurs!
In the short term precious metals market, I might be shorting GDX via DUST (although the good news is that I currently hold NUGT), but that has nothing to do with the fabulous long term fundamentals in play for the entire precious metals market.
At my short term guswinger.com trading service the average NUGT/DUST or UDOW/SDOW trade lasts only a week or two. I increased my average trade size threefold yesterday… to enhance the adrenaline rush and the profits, with professionally managed risk. Investors should always separate trading accounts from long term core position investing accounts. They are as different as night and day.
Please click here now. Jay Powell had to “blink” with rate hikes and so did Donald Trump with tariff taxes or the U.S. stock market would have incinerated yesterday. So, when Trump “supersized” Powell’s blink with his tariffs blink, the US stock market rocketed higher and I promptly sold half my UDOW swing trade position as the market opened. From there, the rally faded. Pros sold the news.
In the big picture, I think most stock market bulls and bears are working a bit too hard to predict either “make my stock market great” higher prices or the end of the bull market.
It’s simply later in the U.S. business cycle now than it was a year ago, and it will be even later as 2019 gets underway. As the cycle matures, volatility typically grows and that makes analysts a bit desperate about trying to figure out what comes next.
Reality check: What comes next is vastly much wilder price action than has occurred at any point in this bull market! That’s just what happens as earnings fade and inflation rises in an environment of debt worship.
Please click here now. Whether it’s the U.S. government’s maniacal obsession with debt growth and citizen extortion via income and capital gains taxation, the emergence of wage inflation, the negative effect of quantitative tightening on corporate stock buyback programs, or the inverting yield curve, what matters is that it’s all happening in the late stage of the business cycle. Price volatility is poised to go “off the charts” in 2019 as these forces intensify dramatically and synergistically.
Stock market investors should not waste time trying to figure out what comes next. There’s only one course of obvious tactical action for long term U.S. stock market investors, and that is: Reduce trade size now!
With the daily gold chart looking spectacular, what can gold stock investors expect? Well, for 2018 I’ve predicted that the “tax loss selling” of the past few years will be confined mainly to the tiny CDNX-listed juniors. GDX, GDXJ, and SIL and their component stocks are in great shape and poised to join gold in a “shotgun” move higher for the medium term.
Please click here now. Double-click to enlarge this GDX daily chart. GDX is sporting dual inverse head and shoulders patterns.
From a technical perspective, GDX can be viewed as a sports car with twin technical turbos that is revving its engine now. GDX appears poised to rise to the minor highs around $20.50, and then race straight to my $23.50 target zone!
There could be some wild volatility around Friday’s jobs report and the December 19 Fed meeting, but the dual H&S patterns are a powerful technical force to be reckoned with. When both the short term technicals and the long term fabulous fundamentals are weighed carefully, most gold stock investors should be in great spirits and ready for the upside journey of a lifetime!

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Back Up The Golden Truck!” report. I highlight six under the radar junior gold stocks that could stage five bagger gains or more in 2019. I include key buy and sell signals for each stock!

Stewart Thomson

Graceland Updates

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US elections are here!
Please click here now. Double-click to enlarge this big picture chart for gold.
From both a technical and fundamental perspective, gold looks solid.
This chart suggests that whatever happens in the US election, it’s going to be positive for gold.
One of my biggest predictions for the fall of 2018 was that a US stock market sell-off would see gold and gold stocks begin to function as the ultimate safe haven.
That happened exactly on cue, and to get an idea of how mainstream media is beginning to open their eyes to this theme, please click here now. Bloomberg Intelligence is highly respected by the global institutional investor community.
It’s really unknown whether the stock market will rally or decline from here, but the odds are now astronomically high that when the next decline does happen…
The world gold community will be smiling because their precious metal investments will perform admirably!
Please click here now. The Fed’s QE and low rate programs incentivized corporations to launch enormous stock buyback programs and incentivized both retail and institutional investors to buy stock with borrowed money.
Merrill’s chief equity market technician is very concerned about the current divergence between the price of the SP500 index and the total US market margin debt.
I’ve predicted that as this business cycle ages, inflation would make a surprising appearance that would catch most analysts off guard.
On that note, please click here now. In America, inflation could stage a shocking move to the upside if the emerging divergence between the interest rate on commercial bank excess reserves and the Fed Funds rate grows.
Even if that doesn’t happen, global inflation is clearly on the move, and the move is to the upside!
Please click here now. Western gold bugs may hate the Chinese government for good reasons, but that doesn’t change the fact that it generally acts more like a lean and mean corporation than like a government, in terms of efficiency.
After accounting for inflation, Chinese real GDP growth is about 3%, and the same is true for India. In the West, most countries have flat or negative real GDP growth.
The same is true for wage growth.
The simple reality is that gold is becoming the world’s most stable asset because three billion Chindian citizens are maniacal savers, obsessed with gold, and getting richer.
The standard of living of these citizens is increasing at a tremendous rate. An immigrant caravan headed towards the US border gets American citizens wildly excited while they buy no gold and try in vain to fix a US stock market price chase that has gone badly wrong.
What’s missed in all the caravan-oriented excitement is that the entire caravan is composed of perhaps 10,000 people…
While every single day there are about 50,000 babies born in India, and almost every one of them will become a maniacal gold buyer as they reach maturity.
The bottom gold bull era line: Are babies golden? Absolutely! Gold-oriented Chindia is a titanic force that just keeps growing.
Please click here now. Double-click to enlarge this short-term gold chart. Keep my big picture gold chart in mind when viewing this chart. A fabulous double-bottom pattern is in play.
Please click here now. Double-click to enlarge this key GDX chart.
There’s solid technical action taking place around a decent inverse H&S bottom pattern. It’s a consolidation of the upside breakout. Please click here now. Gold stock investors should prepare to surf a global inflationary wave, that is already shocking institutional analysts even though it is only in its infancy right now!

Risks, Disclaimers, Legal

A time-tested mantra for the US stock market is, “Sell in May and go away.”
The depth of a stock market sell-off that begins in May depends on where the United States economy sits in the business cycle. In the early stages of the cycle, sell-offs that begin in May are great buying opportunities.
As the business cycle peaks, the US stock market has a nasty habit of not just losing upside momentum in May, but suffering a horrific crash in September or October.
Tomorrow is the next FOMC meeting and there’s clearly a new sheriff in central bank town.
I refer to Ben Bernanke as Dr. Jeckyll and Jay Powell as Mr. Hyde. The bottom line is that Powell is proceeding with aggressive rate hikes and quantitative tightening (QT).
With the Fed now deploying a major hiking cycle while the business cycle is in a late stage, the more appropriate mantra for 2018 could be, “Sell in May or get blown away!”
Please click here now. Double-click to enlarge. Note the price zone on this Dow chart that I’ve defined as a key line in the sand for the US stock market.
Some Fed speakers have talked about the potential for the central bank to become more aggressive, given the inflationary implication of tax cuts coming at this late stage of the business cycle. If Powell himself makes any such statement this week it could create an institutional investor panic. That would likely send the Dow tumbling under my line in the sand zone.
Please click here now. Stock market investors who bought only in recent years should give serious consideration to the use of put options as a strategy to mitigate the fast-growing risks that the US central bank is putting on their table.
My personal stock market focus is China and India, and to a lesser degree South Korea and Japan. These markets can crash along with the US market, but they are poised to recover more quickly and offer vastly more long-term upside potential than US markets.
Most neocons think that North Korea’s Kim responded to Trump threatening him. I don’t believe Kim or most North Koreans are threatened by Trump at all. Trump did show Kim that if North Korea wants to spew endless war mongering propaganda about America, he can do so too. He simply showed Kim how silly and outdated this propaganda is for the modern era.
Peace on the Korean peninsula is coming not because of silly “hawk talk” from Trump but because North Korea’s government is ready to make economic deals and move away from pure communism. Trump has likely offered significant economic carrots to Kim in return for dialing back its nuclear weapons programs.
“Some big investors see warning signs ahead for markets but are holding their positions. Egyptian billionaire Naguib Sawiris is taking action: He’s put half of his $5.7 billion net worth into gold.” – Bloomberg News, May 1, 2018.
Please click here now. Sawiris is arguably one of the world’s biggest gold stock investors. He’s a master investor with a target of $1700 to $1800 for bullion.
Sawiris wants to see more hardcore business owners on the boards of gold mining companies. His opinion is that there are too many miners and bankers on these boards, and to really succeed in what I call the “gold bull era”, more businessmen are needed. I agree!
Please click here now. Double-click to enlarge. Sawiris is one of the largest shareholders in Australia’s Evolution Mining stock, and it’s pretty clear he’s riding a winning horse. Evolution is the number two gold producer in Australia now and it’s magnificently poised to prosper in the China and India oriented gold bull era.
I have a long-term target of $100 a share for Evolution. Investors can be comfortable paying as much as $10 for this fabulous company. In the $5 to $3 area, I’m an eager buyer on every 25cents dip and an eager seller of a third of what I buy on rallies that carry the stock 50cents higher than my buy price.
I cover Evolution (and other key Aussie miners) on my junior miners site at www.gracelandjuniors.com It’s a key component of my extensive “Thunder Down Under” portfolio.
Please click here now. Double-click to enlarge. Gold bullion is performing exactly as I’ve projected it would over the past couple of weeks. Excitingly, it’s now entering my key $1310 to $1280 buy zone.
Investors who took my recommendation to buy put options in the $1370 area should begin booking juicy profits on those options now. Book more profits on more options on any deeper weakness under $1300 ahead of this Friday’s jobs report release.
I don’t expect any serious upside gold price fireworks to occur until the Fed’s June meeting is complete. That will almost certainly see Powell oversee another rate hike and a ramp-up of QT. That should shock US stock and bond markets and blast gold higher. Having said that, gold is oversold now. In the days following the jobs report, a decent move higher is likely in the cards for gold price enthusiasts.
Please click here now. Double-click to enlarge. For the past few years, key Chinese gold jewellery stocks and Aussie miners have soared higher while GDX and most Western miners have languished. I think that’s about to change, with GDX set to join the upside fun, regardless of what happens to bullion in the medium term.
Yesterday’s high-volume day should be noted. Days where volume spikes tend to suggest a minor trend rally or decline is almost finished. Some GDX components (like Barrick) have soared higher while bullion has swooned. That hasn’t happened in a meaningful way since the heady inflationary days of the 1960s and 1970s. The inflation that will be created by launching tax cuts in the late stage of the business cycle is only beginning, and investors need to get positioned in gold stocks now to benefit.
Investors should focus any buying of protective put options more on bullion than gold stocks. Regardless, gold bullion is poised for good second half of the year performance, and gold stocks are poised for a great one!

Stewart Thomson

Graceland Updates

The main drivers of global stock, bond, and gold markets are interest rates and demographics. Unfortunately, most investors focus on items that get a lot of media attention but are almost irrelevant to price discovery in the markets.
Please click here now. I’ve predicted that there will be no trade war, but governments around the world will roll out a modest amount of mildly inflationary tariff taxes.
Clearly, top economists at both Fitch and Goldman have the same outlook that I do. Moderate tariffs are getting a lot of flashy media coverage, but what really matters to the major markets is Fed policy, US citizen demographics, and Chindian citizen demographics.
Some tax cuts have now been passed in America. Yellen and most democrats call them “ill-timed stimulus”. Most republicans appear to believe the tax cuts are well-timed stimulus that combined with deregulation could create tremendous GDP growth, using ridiculous demographics to do it. Throughout world history, this type of thinking has been typical in the late stages of ruling empires.
Libertarians believe there is no bad time to do a tax cut because tax cuts are about the restoration of citizen freedom and morality rather than economic stimulus. They believe these tax cuts must be accelerated until the income and capital gains taxes are eliminated regardless of the consequences for the debt-obsessed government.
The libertarians believe the US government resembles a mafia extortionist operation more than a government. Are they correct?
Well, probably. I don’t think most republicans or democrats really want to face the reality of what governments around the world have become, and nor do the governments themselves.
Regardless, with the Fed engaging in significant QT and a rate hiking cycle, the ability of the US government to finance itself is about to come under stress that is unprecedented in America’s history. Sanctions and tariffs are irrelevant to this stress. QT, rate hikes, and demographics are of epic relevance.
Please click here now. Double-click to enlarge. I don’t think it’s wise to try to pick an exact top in the US bull market for stocks, but it’s very wise to understand that QT and rate hikes are creating the “beginning of the end” for this market.
In 1980 the Fed began a 35-year rate cutting cycle with the baby boomers entering their prime working and investing years. Tax cuts from Reagan increased the government debt, but the demographics of the baby boomers and the Fed’s massive rate cuts made the government’s debt problem a minor issue.
Today, the Fed is engaging in a tightening cycle and the baby boomers are pensioners. The millennials don’t trust banks or government. Elderly savers are destroyed and generally soaked in debt. Tax cuts are morally correct, but they are turning the US government’s debt problem into an epic nightmare. Trump has more cuts planned, and rightly so. These cuts are going to ramp up the government’s debt nightmare, and from a libertarian gold enthusiast’s “end the extortionist insanity” perspective, that’s fantastic.
The bottom line: More stimulus is coming from the US government, and more tightening is coming from the Fed. This is what is known as “gold market nirvana”. Trump will soon announce infrastructure spending stimulus, and do so as Powell announces more rate hikes and accelerated QT. This will crush the bond market and unleash the inflation genie from her bottle.
Western stock and bond markets are going to enter a period of massive volatility and then collapse. Gold is going to continue to rise steadily and then go ballistic as that happens.
Millions of Chinese gold market gamblers that bought physical bullion at $1450 – $1320 in 2013 are being “made whole” as gold moves steadily higher now. The world’s largest gold gambler class is poised to begin a new phase of aggressive buying once gold trades at $1450.
India’s “Gold Board” will soon be launched, which will likely have the power to decide the import duty. In Dubai, talks are underway between gold jewellers and the government to streamline the VAT.
On the supply front, mine supply is poised to decline overall and in most countries except Canada and Russia. I’ve described the emergence of a “gold bull era” based on events in both the West and the East, and any gold market investor reading even a portion of what I’ve written here today can only come to the same conclusion.
Please click here now. Double-click to enlarge this key daily gold chart. Gold is poised in what I call a “golden coil” formation, and there’s a miniature bull wedge in play as well. It’s unknown whether gold drifts down one more time within the coil or just blasts above $1370 now. What is known is that the upside blast is coming. Fed tightening, Chindian buying, and US government stimulus are going to make it happen.
Please click here now. Double-click to enlarge this T-bond chart. The next big theme that US institutional money managers are going to face is the end of the bull market in bonds.
For 35 years, investors’ stock market meltdowns have been buffered by bond market rallies. In early 2018, that changed. The bond market barely rallied on stock market crash days, and fell on some of them. It has not reached the panic stage for money managers, but they are getting concerned.
Not since Paul Volker ruled the Fed has a Fed chair been as forceful about tightening as Powell. Last week, with the Dow down 700 points, he gave a speech to the media stating that more rate hikes were coming. A lot of money managers think he is bluffing. They don’t believe he will hike relentlessly or keep ramping up QT if the stock market falls.
These money managers are greatly mistaken, and as more rate hikes, QT, and fiscal stimulus turn their supposed safe haven of T-bonds into flaming rice paper, they will turn to gold. It’s already starting. GLD-NYSE has seen tonnage rise to 859 tons during the latest stock market gyrations. The bond bull market is dead, and fiscal stimulus and Fed tightening are going to pressure the dollar as well as the stock and bond markets, leaving gold as the only safe haven for investors.
Please click here now. One of my largest gold stock holdings is of course Chow Tai Fook, China’s biggest gold jewellery retailer. I cover the action at my www.gracelandjuniors.com website. This chart tells the story of Chindian demand for gold. Chinese gamblers don’t gamble much on paper gold markets. They buy gold bullion and jewellery to get in on the upside price action.
This stock is a key leading indicator for Western gold miners. On that note, please click here now. Double-click to enlarge this interesting GDX chart. I’ve coined the term “Safehavenization of Gold Stocks” to describe the rise of institutional money manager interest in gold stocks as an actual safe haven from the coming implosion of US government, debt, and stock markets.
The volume pattern is positive for GDX and most gold stocks, but what’s most interesting is that a price rally of just a few dollars a share represents almost a ten percent gain. For institutional money managers facing the hurricane winds created by fiscal stimulus and Fed tightening in stock and bond markets, gold stocks are becoming an ever-more enticing opportunity for both shelter and gain. Gold investors around the world should be totally comfortable buying various gold stocks on all two and three-day pullbacks. Sell a portion of what is bought on rallies, and hold the rest to enjoy the biggest rewards offered in the glory of the gold bull era!

Thanks and Cheers,

Stewart Thomson, Graceland Updates

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I’ve predicted that in 2018 the US stock market would suffer a series of crashes somewhat akin to the 1987 event, but smaller in size.
Please click here now. Double-click to enlarge this interesting chart of the US stock market. Clearly, these mini-crashes are starting to happen.
Having said that, I haven’t sold any of my US bank stocks and I have no plans to do so.
To understand why I’m still “long and strong” the bank stocks in this environment, please click here now. Bank profits are soaring because of tax cuts, QT, and rate hikes.
Corporate boards are still using the bulk of the profits for stock buybacks and bonuses for the “fat cats”, while throwing crumbs to the lower-paid workers.
As disgusting as that is, it’s a good environment to own stock market indexes, and a great environment to own bank stocks.
This is the stage of the business cycle where “big growth” transitions to “decent growth with inflation”. Simply put, in this environment bank stocks do well, growth stocks stumble, and gold stocks start to get modest liquidity flows from institutions.
As the cycle moves to “inflation with low growth”, growth stocks crash, bank stocks fade, and gold stocks soar.
Please click here now. Double-click to enlarge this key T-bond chart. US interest rates are rising now and poised to rise relentlessly for the next several years.
There are “institutional thresholds” of importance in major markets. For the US stock market, institutions will generally continue to buy stocksuntil the ten-year yield reaches the 4%-5% range.
Please click here now: http://www.graceland-updates.com/images/stories/18mar/2018mar27tenyearyield1.png Double-click to enlarge.
Goldman is predicting four rate hikes this year and I’m predicting a minimum of three. The yield should get close to 4% by the end of this year.
I realise that most gold bugs are “stock market crash enthusiasts”. There’s no question that the US stock market has soared mainly because the “hot air” of QE and low rates has incentivized corporate boards to focus on stock market buybacks rather than worker wages and business expansion.
Having said that, patience is required. Investors need to focus on the slow but steady cyclical transition from growth to inflation as the Fed pushes the enormous QE money ball out of government bonds and into the fractional reserve banking system.
Please click here now. Double-click to enlarge this fabulous daily gold chart. The rectangle pattern is flag-like, and suggests gold is coiling to burst above my key $1370 resistance zone.
Short term traders who took my recommendation to buy the $1310 area should be sellers in this $1340-$1355 area. That’s because there could be quite a bit more coiling action before a true breakout above $1370 occurs. The bottom line is that investors need to be patient and traders need to book profits now!
Looking at the big picture, the inflation trade is clearly becoming more positive for gold every day. The Trump decision to appoint John “The Hawk” Bolton to a key post in his administration makes the geopolitical trade for gold a positive one as well.
What about the love trade? Well, please click here now. The 2019 Indian elections are approaching and the Modi government is likely to win again.
Modi is backed with “monster money” and to ensure he wins again he’s launching a huge farm income program called MSP. This program is inflationary because it boosts crop prices. That alone is positive for the global price of gold.
The MSP program also is poised to create a massive boost in farmer income, and rural Indians always use extra income to buy more gold. Please click here now. This MSP policy launch is happening at the same time as the influential Niti Aayog panel pushes the Modi government to implement a massive gold-positive policy agenda.
I’ve been adamant that 2018 would see the absolute end of gold-negative policy from the Modi government, and the launch of positive policy. That’s clearly in play, and it’s going to exponentially accelerate relentlessly.
Please click here now. Double-click to enlarge this GDX chart. The technical action is superb, and investors should now be buyers of their favourite GDX and GDXJ component stocks on all two and three-day pullbacks.
Please click here now. Double-click to enlarge. With food inflation set to surge in India and general wage and price inflation on the move in America, it’s time for investors to take a more serious interest in silver stocks. The big upside action won’t start until there’s a volume-based breakout from the bull wedge pattern on this silver stocks ETF chart.
Call option buyers should wait for that breakout before buying, but all silver stock enthusiasts should be buyers of key SIL component stocks right now. Use two and three-day pull backs to take buy-side action, in preparation for the imminent upside rocket ride!

Thanks and Cheers,

Stewart Thomson, Graceland Updates

Risks, Disclaimers, Legal

Are You Prepared?

The appointment of Jerome Powell as new Fed chair is likely the catalyst that ushers in a multi-decade era of rising inflation and soaring gold stocks.
I’ve announced a long term target for GDX of $15,000. That really isn’t very high… given the strong inflation numbers that I am projecting for America in the years ahead.
Having said that, Powell has only been on the job for one day. Investors need to show patience. Wait to see what he actually does before taking “back up the truck” market actions.
Powell’s first significant actions are likely to be announced at the March 21 Fed meeting. I expect a firm commitment to more rate hikes and more quantitative tightening.
That’s inflationary because it boosts bank profit margins and they become more willing to take lending risk. That produces a rise in the velocity of money.
As the cost of borrowing rises, companies will raise prices and workers will demand higher wages. If Powell also makes a firm commitment to deregulating America’s thousands of small banks on or before March 21, inflation would accelerate even more rapidly.
Please click here now. It’s my contention that wage inflation of 20%+ is not just theoretically possibly, but morally justified. Here’s why:
For many years, global governments have colluded with central banks to run socialist/fascist QE programs. These programs moved money from workers and savers to government bonds and stock markets. Additional money was simply printed and taken.
QT, higher rates, and small bank deregulation are beginning to re-empower Main Street. This is happening while “Government Street” (the bond market and the dollar) and Wall Street risk disintegrating.
Please click here now. Double-click to enlarge this exciting bond market chart. A head and shoulders top pattern is in play. The neckline has been crushed.
Please click here now. Around the world, governments are announcing import duties. That’s inflationary. If India’s government had cut the gold import duty, it would have increased demand, but the duty itself is also inflationary.
Please click here now. Institutional money managers are starting to focus on the inflationary implications of Trump’s tax cuts that I highlighted when he first proposed them. In the context of QT, rate hikes, and deregulation, these cuts can increase inflation quite significantly.
Please click here now. Double-click to enlarge. The bond market is building what I have dubbed a “super top” pattern. The target of the super top is about 80.
The Fed has projected that rates will take many years to reach “normal” levels. This chart suggests the normalization process will take about seven more years.
This “normalization” sounds great in theory. In the real world, it involves a decline to 80 for the T-bond price. That would drive borrowing costs for the US government to incredibly painful levels.
In addition, rates could rise much more quickly than this chart suggests if Trump ordered T-bond creditors to take a haircut on what they are owed. That’s one of his campaign promises.
As inflation surges, Trump may be forced to devalue the dollar and revalue gold to prevent the US government from imploding or becoming a full dictatorship. Inflate, default, or die. In the near -immediate future, these are the only choices President Trump will have to manage the US government’s horrific size, power, and debt.
On that note, click here now. Double-click to enlarge. The dollar could go into free fall if it breaks cleanly under 108 against the yen, and the bear flag chart action suggests that is going to happen very soon.
A breakdown would almost certainly correlate with a gold price surge to about $1370. Please click here now. Double-click to enlarge this daily gold chart.
There is a small head and shoulders top pattern in play that could push gold modestly lower to the $1310 – $1290 area. The good news is that a bull flag-like pattern is also forming that could negate the top pattern.
Given the fast-growing inflationary fundamentals, gold investors should now be walking the price gridlines with maximum confidence. Fresh buying for eager gamblers and investors should be done at key levels that I’ve noted on the chart.
Gold has been rising as the T-bond has fallen hard, and rising as the T-bond has rallied. That’s because gold price discovery for the fear trade is not about rates per se, but about risk. As stock and bond market investors get rocked hard, gold looks like the ultimate asset iron lady!
Please click here now. A major gold stocks versus gold bull era will occur as the T-bond super top ushers in extraordinarily high inflation for the long term.
Gold stock enthusiasts need to watch Powell’s actions, because they are the catalysts that will push GDX above $26 and officially begin that fabulous era. Gamblers can buy call options on a two-day close over $26. I’ve urged long term investors to be aggressive buyers in my $23 – $18 tactical accumulation zone. The bottom line is that it’s the cusp of a new era for gold stock investors, and Powell officially launches it on March 21!

Thanks and Cheers,

Stewart Thomson

Graceland Updates

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Risks, Disclaimers, Legal

Are You Prepared?

Without growth in Western gold ETF holdings, the “decent but not spectacular” demand from China and India is not strong enough to move the gold price higher.
Please click here now. The SPDR (GLD-nyse) fund gold holdings currently sit at about 843 tonnes. There has been very little change in the total tonnage for several months. That’s neutral for the gold price.
Governments don’t like their citizens to own much gold. Restrictions they impose (like India’s import duty as a recent example) dampen demand enough so that the price rises very slowly most of the time.
Economic growth in China and India are increasing demand (the love trade) and mine supply is contracting, but the process is essentially “Chindian water torture” for investors who want to see the price skyrocket like it did in the late 1970s.
Investors that want “big action” in the gold price need to wait patiently for the US business cycle to peak.
For the price of gold to really sizzle, the business cycle needs to have an inflationary peak. That hasn’t happened since the 1970s. Many gold price analysts have used overlap charts that suggest the gold market now is akin to the 1976-1978 period.
I look at fundamentals first, and charts second. From an inflationary standpoint, the US economy looks more akin to the late 1960s than the late 1970s.
The winds of inflation are beginning to blow, but they won’t become a hurricane for some time. Having said that, I’ve noted that the St. Louis Fed has calculated that the QE program would have sent the US inflation rate above 30% if money velocity had been at normal levels.
The Fed is projecting seven rate hikes over the next 24 months, and Goldman Sachs projects there could be nine. I’ve predicted there will be six. Whatever the number turns out to be, it will likely be enough to move a lot of money into bank accounts.
As that happens, banks are likely to become very aggressive with new loans, because the fractional reserve banking system makes the potential reward worth the risk. The Fed’s new accelerated quantitative tightening program will also help push money into banks.
Odds are very high that money velocity begins to rise quite strongly later in 2018 and into 2019. The bottom line is that inflation could rise much faster than anticipated over the next 24 months.
That could essentially create an institutional and retail investor stampede into gold.
For now, in the $1200 – $1000 price zone gold is well-supported but sluggish.
I don’t expect that to change until money velocity moves higher, and that’s unlikely to happen until institutions see that the Fed is serious about consistent hikes and accelerated QT.
Trump’s tax cuts and tariffs can speed up the arrival of inflation, but the tariff action has been modest, and his tax cuts are bogged down in congress and the senate. The meandering gold price reflects this quagmire.
Please click here now. Double-click to enlarge. Gold’s technical price action also fits with the slow arrival of inflation. Bulls and bears are equally frustrated.
My www.gudividends.com investors are happy, because they get paid to wait. There’s no question that gold investors need to wait. If investors must wait for something, they should get paid with a bird in the hand, not just a promise of a bird in the bush!
Dividends are probably the least exciting type of investment for gold bugs. A lot of the stock market’s gains have really come from dividends, but few investors think about this fact.
Compounded 4% – 8% payouts can build significant wealth over time, and reduce the frustration of waiting for gold market “blastoff” moments.
Please click here now. Double-click to enlarge. The dollar-yen price action correlates strongly with dollar-gold.
There’s a bear wedge in play and overhead resistance at about 114. There’s also a potential head and shoulders top formation. The dollar “should” fall down, but it may not happen until Chinese New Year gold buying begins and the Fed does its next rate hike.
Please click here now. Double-click to enlarge this GDX chart. A beautiful bull wedge is in play and my 14,7,7 Stochastics oscillator is moving higher.
Unfortunately, without a rally in gold bullion, GDX is unlikely to perform as well as the bull wedge pattern implies it will.
Gold bugs have incredible patience and intestinal fortitude. That’s necessary because debt-soaked governments will do anything and everything to avoid paying the piper. I’ve described the $23 – $18 price zone as a key accumulation zone for investors, and GDX is in the upper part of that zone now. Buying gold stocks value is vastly more important than predicting the price, and that value is here for the taking in this key accumulation zone!

Stewart Thomson

Graceland Updates

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