Preparing For The End...
...of the year. It certainly has been a wild one and we've still got a month to go. What's in store for us? Well, I'm prepared to hazard a guess.
On balance, it's been a pretty good year here in TurdLand. I figure I probably only batted about 60-70% on the day-to-day stuff but the long-term forecasts have been pretty solid. First there was this:
Followed by this:
Then there was this:
And, finally, this:
Not that this is magic or that I'm anyone special. As I've often stated, predicting the future price of the precious metals is really quite simple. Once you accept that the precious metals are the most blatantly manipulated "market" on the face of the earth, predicting future price gets a lot easier. Then, when you factor in that gold has progressed a nearly perfect 20-25% each year since 2001, the crystal ball gets remarkably clear. So clear that even a Turd can read it.
You'll recall that gold finished 2010 at about $1435. Immediately thereafter, I began mentioning that gold was likely to trade toward $1750 sometime by late 2011. How could I make this case? Simple. 1435 + 22.5% = 1758. Sorry if that disappoints you but it really is that basic. As for 2012, why complicate matters? As you'll see below, I expect gold to finish 2011 somewhere in the neighborhood of $1800. From there, let's add another 25%. (I'm going for the upper end of the 20-25% range. As awareness grows, however, 25% may end up being a bit conservative.)
$1800 + 25% = $2250
Like this year, gold will probably trade higher than $2250 at some point in 2012. It will also see several, major corrections as The Cartel will still be in there, banging away. In the end, though, your stack will be worth a lot more again 12 months from now, of that you can be certain.
But let's not get ahead of ourselves. We still have the month of December to deal with. First, a caveat. Regular readers have noticed that I've spent quite a bit of time recently discussing the current geo-political instability in the Middle East. Similar to the longer-term predictions recalled above, I'm about to give you another 4-6 week forecast. However, if Israel attacks Iran and/or NATO attacks Syria and/or Pakistan melts down and/or World War III and/or The Second Coming happens, all bets are off. Capiche?
OK, let's talk about gold first. Clearly, we received some extraordinarily bullish news this morning regarding gold. It is tempting to sit back now and say that the coast is clear and that you should buy with impunity. Well, as Lee Corso would say, "not so fast, my friend". Yes the fundos are still overwhelmingly strong and, yes the open interest numbers look quite compelling. Don't get ahead of yourself this month, though. Recent history has shown that The Cartel is not a big fan of late year rallies. In fact, both 2009 and 2010 held pretty lousy Decembers. Though I think we're in for a rally, I'm not looking for gold to go charging back to the old highs, at least not yet.
In the near term, it certainly appears that this latest "correction" is over. Having moved back through 1750 tonight, gold will likely continue higher until it encounters some pretty stout resistance in the area around 1765-1770. This coincides with the downward trendline from the highs of early September. That line served to contain the rally earlier this month and it will likely give gold trouble again. However, it has to give way sometime so I expect gold to break through that line, perhaps as soon as next week. From there, I expect gold to rally toward the top end of the channel that began way back at the lows of the financial crisis back in 2008. This would put gold somewhere near 1825-1840 by mid-month. From there, some year-end profit-taking kicks in and gold settles back to a 12/31/11 close somewhere right around $1800.
So what about silver? Frankly, silver is considerably more challenging. The fundamentals are extraordinarily positive but the desperate manipulation measures put into place this year by the criminal C/C/C (CME/Comex/ Cartel) are having a lasting impact on the futures market. And as long as the dastardly Comex paper silver price is used as the basis for the price of physical, movements in silver are going to be very difficult to forecast.
For now, silver appears stuck in a pennant-type range. I can see nothing on the near-term horizon that will cause it to break out. Once we get into 2012 and overt QE begins anew, silver will again be off to the races. Maybe then we will finally have enough physical investment demand to break the back of the evil C/C/C. Maybe. Until then, we're stuck.
So, there you go. If you are waiting for a consequential forecast such as "Turd's Bottom", I'm sorry to disappoint you. There's simply too much intervention/manipulation of all markets at the time being to confidently make such a forecast. Let's just get through this month, see where we finish 2011 and then make some plans for 2012. You can be certain that the new year will bring another set of remarkable runs in the PMs, so, be patient. Now is not the time to be going all-in. The next opportunity to do so will reveal itself soon. In the meantime, sit back and relax. Enjoy the holiday season. Maybe hit the company Christmas party. Spill some booze on your boss while simultaneously hitting on his wife. Silent Night, Auld Lang Syne and all that jazz. Then, get ready for an historic 2012. TF