Surviving the gold market

June 9, 2015 10:12 AM

In my previous article yesterday I tried to stress the importance of getting to the sidelines before gold begins the final decline into its eight-year cycle low. Today I’m going to show you what I think is in store and why.

First off let me dispel any notion that this was a natural bear market in gold. On the contrary, this has been a manufactured bear market brought about by intense paper market manipulation by the bullion banks ever since Germany asked for their gold back.

It’s been my theory for almost 2 years now that the bullion banks are trying to force the gold market as far down as possible in order to maximize the potential upside once the secular bull market resumes. It’s also been my feeling that the manipulation would continue until gold at least retraces back to the $1000-$1050 level, and we may, and probably will, get a panic overshoot for a few days below that level.

Let me explain. Let’s assume that on the conservative side the bubble phase of gold reaches at least $5000. Well, if the final phase of the bull market starts at $1500 and goes to $5000 that is a 230 percent gain. 

On the other hand, if the bullion banks can artificially depress the price of gold to $1000 or even $900 then the potential gain increases to 400 percent or more. And if you think that’s some juicy profits wait till I get into what I think is going to unfold in the mining sector.

First, I need to show you is a long-term chart of the HUI mining index. Notice how the bottom last November got far enough to test the `08 lows. Also notice that the bounce off of that bottom has been extremely weak, signaling that this was unlikely the final bear market low.
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About the Author

Gary Savage started SmartMoneyTracker in 2007 right before the bear market began, and called the top in Nov. 2007. Cycles and sentiment are his two primary analysis tools. In his teens, he was a national Judo champion. He was a national weightlifting champion at 26, and by 39 he was a world weightlifting champion and world record holder. An entrepeneur his entire life, he has multiple businesses in addition to SmartMoneyTracker.