Gold & A Failed Oil Price Cap

As empires peak and fade (or burn), the supposed leaders and key figures of the empire tend to engage in maniacal meddling in the affairs of other nations… and enjoy bragging about it.

One of America’s most famous meddlers is Janet Yellen.  In addition to appointing herself as a tax rate “lord” for the citizens of the world, she has decided that she will set the price buyers will pay for Russian oil. 

If Janet is successful in forcing Russian oil exporters to accept $40-$60/bbl, could gold tumble to the huge $1400-$1300 support zone?

The $1675-$1700 is a huge support zone, and gold is linked to oil, so of course a major decline in the oil price could negatively affect gold.

Some energy market experts believe Yellen’s meddling could backfire and send oil to $140.  JP Morgan analysts have an even more horrifying scenario, where the meddling sends it all the way to $380!

A more positive view of the weekly gold chart.  The RSI oscillator and Stochastics are the most oversold since 2018.  

This is the most likely scenario for gold from the $1700-$1675 area: a pause and then a nice rally.

Gold rallied after the CPI report, but it was “small potatoes”.  A much bigger move upside is likely to occur after the July 27 Fed meet, which takes place next week.

The smart money commercial traders are piling on long gold positions and selling shorts on the COMEX. 

This is another indication that gold is ready for a big bounce higher against US fiat.

The dollar index looks toppy and a break under 105 could create significant selling. 

The euro is bouncing from “par” with the dollar.  The par zone is significant and a major rally for the euro is likely. That’s also good for gold.

China’s economy has rebounded (along with more debt).  If that continues, Chinese citizen demand for gold will jump too.

What about the miners?  The key CDNX chart.  A significant bull wedge breakout may now be in play.

With the Dow and gold both up early this morning, odds favour more upside action for the miners today. 

My junior resource stocks newsletter at $199/12mths is an investor favourite.  Given the CDNX buy signal and the powerful action in “hotties” like our Vulcan and Salt stock picks, I’m doing a special pricing this week, of just $169 for 14mths!  Click this link or send me an email if you want the special offer and I’ll get you onboard. Thank-you.

The important XME chart.  I highlighted $40 as a key buy zone, and XME was up yesterday with gold quiet and the Dow down. 

My main current concern is that the American government is trying to wage war against Russia in Russia’s backyard… and it could go badly awry “sooner than expected” creating a huge surge in commodity prices.  XME is a fabulous way to play all the metals (both base and precious).

The US government failed badly in its wars against lesser opponents like Afghanistan, Iraq, and Syria.  The current US president is a draft dodger with alleged mental issues… and a huge 2021-2025 war cycle is in play. 

Taking on Russia in its own backyard and using debt to do it seems to be an act of war mongering madness destined to end in much bigger failure for America than the myriad of failures of the past…

But it’s fabulous news for gold and silver.

The GOAU chart.  There’s no question that given the price volatility, serious gold bugs need to hold substantial amounts of fiat cash, gold bullion, and consider put options if heavily engaged in the miners.

At the same time, the current set-up for a massive rally in the miners is the best in many years; volume has surged in GOAU, Stochastics and RSI are heavily oversold… and it all gets officially underway with a breakout over the amber downtrend line. 

That breakout looks like it will happen on (or even before) the July 27 Fed meet, which is only about a week away from today!

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my free “Gold Stocks Dollar Store!” report.  I highlight eight red hot junior miners trading under a dollar that have big volume coming into them and are ready for upside action!  Key investor tactics are highlighted in the report.

Thanks!    

Cheers

St

Stewart Thomson 

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form.  Giving clarity of each point and saving valuable reading time.

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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:   

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