• 20 mins DOE Seeks To Boost Usage Of Carbon Capture Tech
  • 1 hour Taxpayers Likely To Pick Up The Growing Tab For DAPL Protests
  • 4 hours WTI At 7-Month High On Supply Optimism, Kurdistan Referendum
  • 10 hours Permian Still Holds 60-70 Billion Barrels Of Recoverable Oil
  • 15 hours Petrobras Creditors Agree To $6.22 Billion Debt Swap
  • 19 hours Cracks Emerge In OPEC-Russia Oil Output Cut Pact
  • 23 hours Iran Calls On OPEC To Sway Libya, Nigeria To Join Cut
  • 1 day Chevron To Invest $4B In Permian Production
  • 1 day U.S.-Backed Forces Retake Syrian Conoco Gas Plant From ISIS
  • 1 day Iraq Says Shell May Not Quit Majnoon Oilfield
  • 4 days Nigerian Oil Output Below 1.8 Million BPD Quota
  • 4 days Colorado Landfills Contain Radioactive Substances From Oil Sector
  • 4 days Phillips 66 Partners To Buy Phillips 66 Assets In $2.4B Deal
  • 4 days Japan Court Slams Tepco With Fukushima Damages Bill
  • 4 days Oil Spills From Pipeline After Syria Army Retakes Oil Field From ISIS
  • 4 days Total Joins Chevron In Gulf Of Mexico Development
  • 4 days Goldman Chief Urges Riyadh To Get Vision 2030 Going
  • 4 days OPEC Talks End Without Recommendation On Output Cut Extension
  • 4 days Jamaican Refinery Expansion Stalls Due To Venezuela’s Financial Woes
  • 5 days India In Talks to Acquire 20 Percent Of UAE Oilfield
  • 5 days The Real Cause Of Peak Gasoline Demand
  • 5 days Hundreds Of Vertical Oil Wells Damaged By Horizontal Fracking
  • 5 days Oil Exempt In Fresh Sanctions On North Korea
  • 5 days Sudan, South Sudan Sign Deal To Boost Oil Output
  • 5 days Peruvian Villagers Shut Down 50 Oil Wells In Protest
  • 5 days Bay Area Sues Big Oil For Billions
  • 5 days Lukoil Looks To Sell Italian Refinery As Crimea Sanctions Intensify
  • 6 days Kurdistan’s Biggest Source Of Oil Funds
  • 6 days Oil Prices On Track For Largest Q3 Gain Since 2004
  • 6 days Reliance Plans To Boost Capacity Of World’s Biggest Oil Refinery
  • 6 days Saudi Aramco May Unveil Financials In Early 2018
  • 6 days Has The EIA Been Overestimating Oil Production?
  • 6 days Taiwan Cuts Off Fossil Fuels To North Korea
  • 6 days Clash In Oil-Rich South Sudan Region Kills At Least 25
  • 6 days Lebanon Passes Oil Taxation Law Ahead Of First Licensing Auction
  • 7 days India’s Oil Majors To Lift Borrowing To Cover Dividends, Capex
  • 7 days Gulf Keystone Plans Further Oil Output Increase In Kurdistan
  • 7 days Venezuela’s Crisis Deepens As Hurricane Approaches
  • 7 days Tension Rises In Oil-Rich Kurdistan
  • 7 days Petrobras To Issue $2B New Bonds, Exchange Shorter-Term Debt
Alt Text

This Key Gold Producer Sees Its Production Slump

Africa’s second gold producer Ghana…

Alt Text

Who Is Leading The Gold Rush?

Two gold heavyweights have joined…

Alt Text

Expect Mine Closures In This Key Gold Mining Nation

Major gold mining nation South…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Gold is Breaking out to the Upside

Look at the $25 move in gold today, and it's clear that an upside breakout is imminent. It made this move on a whisper of a rumour about a speculation that China may take out an eyedropper and tickle their economy with a few more drops of stimulus.

This is proof positive of how sensitive the barbarous relic is to global QE/stimulus. Given that we can expect a steady dose of this medication from central bankers for years to come, the outlook for gold today is probably better than for any other single asset class. Gold charts are breaking out all over and have already broken out to new all-time highs against the Swiss franc, the Australian dollar, and the Euro. It is just a matter of time before the party spreads to the dollar.

Why is monetary easing so crucial for gold's outlook? Take a look at the chart below showing the Federal Reserve Bank of St. Louis adjusted monetary base. When QE2 was launched, the base grew exponentially, and so did the price of gold, from $1,100 an ounce to $1,922. When QE2 ended in June, 2011 the monetary base flat-lined, and so did the barbarous relic, falling back to $1,500.

So what will QE3 do for the price of gold? The really easy answer here is that it doubles again to $3,000, possibly within the anticipated 24-month life of the current round of monetary easing. Since I am a cautious cheapskate, I am pegging my target at the old inflation adjusted high of $2,300. One thing is certain. To mix a few metaphors, gold bugs are going to be watching the monthly updates of this chart like hawks. This is why I tell guests at my global strategy luncheons that this is the only chart they need to look at for the foreseeable future.

How long will this love-fest last? Look at the next chart of global growth prospects, which are headed in a generally southern direction. Consider the inverse of this chart to be the likelihood of further, more aggressive monetary easings -- gold bulls absolutely love it.

Use every dip in gold to load the boat. Buy calls, call spreads, or outright shares in the gold ETF (GLD). Look at the biggest gold miners, like Barrack Gold (ABX) and Newmont Mining (NEM), the big miner's ETF (GDX), and skip the juniors. The more aggressive can buy gold futures to take advantage of the 18:1 leverage. You might buy some silver too.

Zero Monetary Growth

Cyclical Headwinds

SPDR Gold Trust Shares 8

SPDR Gold Trust Shares/Euro

SPDR GOld Trust Shares/Australian Dollar




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News