The Time is NOW!
By James M. Carrillo
June 29, 2012
The Gold bull market has been sleeping for ten months now. It was in
ridiculously overbought territory when it hit $1,900.00 an ounce, nearly
every media outlet was saying it will break $2,000.00, even the long term
gold bears were convinced. Markets however, do need a breather to digest
such large gains, and here we are! What now?! Ten short months and nearly
every gold bull and every media outlet has now either either given up it
or is now saying it will drop significantly to extremes in some cases,
"Is Gold on the Edge of a Violent Downturn?" -CNBC.
The key to the future of Gold is in the fundamentals of rapidly
expanding money creation (as can be seen on the graph below) by the
Federal Reserve. It fully supports gold moving much, much higher, as does
the zero Interest rate policy they have put in place until at least the
end of 2014. There is NO yield to be had folks, our cost of living is sure
to rise because they are trying to inflate there way out. But when is the
best time to buy? It is never wise to buy or wait until the market is
screaming upwards and the news media is all aboard. It is time when the
fundamentals are intact and the media begins to jump on the negativity
The insanity above should absolutely scare you to death! This is our
countries Monetary base! It is very clear that we are attempting to print
our way out of debt? This is being done by adding massive amounts of money
backed by nothing but the full faith and credit of a bankrupt government,
to the system. Never before in the history of our country, or in the
history of the Federal Reserve have we done anything like this as can
clearly be seen.
Re-iterating a phrase I used in an article written in 2008 warning
of a stock collapse in January 2008, there is a "Lag Between Cause
and Effect". The effect of what we have done here will be staggering
to the buying power of our currency over the coming years and of course
your cost of living. Gold has historically moved inversely, so saving in
gold makes far more sense today than saving in bonds, cds, savings or
Below is a graph of gold prices, as mentioned above you can clearly
see that gold was massively overbought when it surged to $1,900.00, it
literally went from $1,000.00 an ounce to $1,900.00 in almost a straight
shot. This type of gain has actually been the norm over the past decade,
the problem is that most people buy after the surge is almost over. Then
people tend to panic when it corrects or does nothing for any extended
period of time.
This data when examined can help you with timing a buy for what I
still see as a highly profitable long term hold.
Buy when open interest (number of futures contracts) is at or below
300000, buy when it has seasonal lows, usually in the May - July time
frame, buy when it is closest to its long term moving averages, not when
it is so far above them that you have a lot of short term price risk,
which may cause you to panic. Lastly buy after a prolonged consolidation
(sideways pattern) as explained below.
Based on the fundamentals and the data shown above. It is clear the
best time to buy or accumulate heavily has been in the May-July time
frames, preferably when open interest is below 300000, and after a eight
to twelve month or so sideways consolidation, when it is closest to its
long term moving averages. In my opinion that time is NOW. Protect your
hard earned savings before it is too late, don't panic buy on the next
Remember that Gold has averaged gains of better than 20% per year
for over a decade, that growth has been better than 35% if you buy on a
correction like this. As can be seen in the chart above the best time to
buy is major consolidations like the ones in 2004-05, prices then nearly
doubled from $400.00 to $750.00 then 2006-2007, gold went from $650.00 to
$1,000.00 and again from 2008- 2009, the price did double from $900 to
$1,800.00. In my opinion we are now set up for a similar rapid move up.
The growth of money indicates that this growth will accelerate in the
coming years. Don't wait to any longer to buy gold, the time is NOW.