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$1400-$1600 USD Gold in 12-24 months | 7th June 2017

$1400-$1600 USD Gold in 12-24 months  |  7th June 2017

Good morning Patrons of the Chamber of Merchants.

You may or may not have noticed that I have not posted even a fraction of what I used to post.

The reason is very simple:

I have attained complete and utter peace with regard to what the future holds for my portfolio.

In a blink of an eye it all became quite clear to me and the need for daily postings became redundant.

So what I will be focusing on more now will be longer term trends with regard to gold, wealth, economics etc… which is how this site originally started.

Additionally I will be commenting on individual companies , especially the ones in my portfolio.

I read an interesting summary from another trader in my network last night. Given the surge in gold and and gold miners, they have wiped out most of their gains from the last 8 weeks (being short precious metals).

The Merchant on the other hand has again shifted tactic to a big picture view.

 

You see, originally I was focused big picture. Then, on Trump’s election win, gold was sold off, the stock market rocketed and everything was flipped.

 

Hence, my new year’s resolution of trading actively and prudently (you can check it out by using the search function.)

 

However, about 8 weeks ago, the picture became really clear: the Trumphoria was wearing off and the reality of the economics was setting back in: low gdp, weakness in full time employment, worrying inflation, low productivity and to top it all off, a Federal Reserve that was hell-bent on raising rates to project strength.

When I saw the big picture, I realised that time will be the remedy to madness. Got gold?

So below here is a no mess no fuss chart of the area I believe gold will be headed in 6-24 months with variation.

  1. I firmly believe we will never, ever see less than $1100 gold ever ever again. Those days are past. Sub $1100 USD gold will be a value in time immemorial:
  2. 1.
    a time in the past that was so long ago that people have no knowledge or memory of it.
    “markets had been held there from time immemorial

  3. I believe a majority of USD gold will be spend around $1400-$1600 over the next 2 years. Chart below:

Gold Chart 24 months

In my estimation (wrongly or rightly, it will result in AUD and CAD gold prices of $2000-$2200 (give or take a few hundred lol.)

And it’s all coming to a head when the Fed makes their final interest rate decisions over the next 6 months: the wheels will be set in motion and the ride will be for those who bought tickets now.

Why?

Consider this: GDP is failing in the U.S… the money is failing as consumer expenditure weakens and dies. Retail is dying as a reflection of the state of the U.S consumer… consumer business failure is reflecting that development. The Trump stimulus has failed to materialise and consumer sentiment soft data had fallen into the same miry pit.

Everything that was occurring prior to the Trump win appears to be resuming course. Add to that: the Fed has raised rates twice which will, in Keynesian theory, slow down an overheating economy. So I’ll say it for the record: The Western nations appear to be teetering on the edge of a recession and the most powerful financial establishment in the world has been tightening the reigns, ultimately accelerating the slow down.

 

I’ll end off with this mud map which is in my brain, that calms me during volatile and disappointing days. It may be completely incorrect…but I am betting my entire wealth that it’s not.

 

Each to their own.

 

Next post will be on Blackham Resources…. BLK.ASX

 

Think Better.

 

|the Merchant

 

14 Comments

  1. Doodoo

    Any updates or views on BLK? Merchant you seem to have disappeared off Twitter too!

    Reply
    • the Merchant

      Ha. Thanks. Not disappeared. Just constantly blocked. BLK is a good buy once their capital raising is done whenever that is. If they report a reduced AISC which they should, then this will be a multi-bagger over 1-3 years. Patience is a virtue they say

      Reply
      • Doodoo

        Blocked from Twitter? But you have never posted anything offensive – argh stupid twitter. BLK has dropped almost 1 whole dollar in a relative short time – that is a scary looking chart. Any ideas when the capital raising will be done? I have noticed that North American miners have been super sluggish too against a gold price that has been quite firm. It seems that money is being piled into tech and not so much commodities and related stocks.

        Reply
  2. Matthew Butler

    Hey Jack, I’m looking to re-enter the Australian gold miners (I sold out a couple of months ago of Silver Lake, Evolution and Northern Star), but I’m admittedly more knowledgeable of overseas miners. Did you ever do a portfolio page in the end? (I remember you talking about it at one point). I would be very interested what you’re weighted towards (and your interest/upcoming article in BLK considering articles such as this: https://seekingalpha.com/article/4079348-blackham-resources-washed-deeply-undervalued )

    Reply
    • the Merchant

      Hi Matthew! I worked on it but abandoned after a while… If I entered BLK today I would only expect a decent return in 12-24 months. But a return I would be proud of and confident in…

      Reply
  3. thespeculator01

    Need to be patient anon, when the bull starts it will run for 3-5 years :). I check portfolios monthly, week to week or day to day changes are not important.

    Reply
  4. Boudicca

    Hey Jack!

    The following chart makes me think the bigger picture isn’t fully complete:

    http://news.gold-eagle.com/article/gold-forecast-key-ratio-hints-gold-price-breakout/633

    The author believes that Au will break out of the huge pennant to the upside. I’ve also read similar from other analysts

    http://investinghaven.com/next-big-move/gold-price-breakout-bullish-trend-2017/ but they caution that Au must close above $1290

    for a minimum of 3 consecutive trading days. We are getting very close. What do you think?

    Reply
  5. John Green

    Good to hear you write what Im thinking. I look forward to you musings on BLK. Was a holder but bailed because there is just so much negativity surronding the management…

    Reply
  6. Blackened

    Welcome back! Sure has been a while 🙂

    Reply
  7. anonymous

    Thanks for update.

    Everyone will really appreciate if you do not disappear when gold stocks are down! (wink :))

    Reply
    • the Merchant

      😊 thanks for that. If anything , I think a bigger picture view will benefit everyone involved in gold. I’ve also purposefully not been monitoring daily because my portfolio will need at least two quarters to rectify their reports. When in doubt, read some past reports 😉

      Reply

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