Gold: An Institutional Stampede Into Miners

Some analysts believe China could deliver 2 trillion yuan ($296.21 billion) worth of cuts in taxes and fees, and allow local governments to issue another 2 trillion yuan in special bonds largely used to fund key projects.” – CNBC News, Jan 15, 2019.

China’s economy is likely to grow in the 6.2%-6.5% range for 2019 and the stimulus is inflationary. While that growth is the slowest pace in almost thirty years, it’s still “head and shoulders” above the horrifying meltdown in growth that the United States is likely about to experience.

Goldman is predicting a meltdown in US earnings growth from 20%+ in 2018 to just 3% to 6% for 2019!

Goldman’s heavyweight analysts are also predicting that US GDP growth melts towards 1% by the third quarter of this year. This, while Morgan Stanley is predicting an “earnings recession”.

Germany’s economy is already slipping towards 1% GDP growth and EU earnings are unlikely to grow more 5% in 2019.

Interestingly, most big bank economists are predicting an uptick in inflation will accompany the slide in Western earnings and GDP growth. Clearly, all roads lead to…gold!

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Gold continues to perform remarkably well at a time when a substantial pullback would be expected.

Conspiracy buffs are waiting for the “banksters” to smash the gold price. Where is the smash? Well, it doesn’t exist. All that’s happening is mild consolidation.

A pullback to key Fibonacci retracement lines in the $1250-$1260 area would be healthy but even that may not happen. Current technical action indicates a very healthy gold market.

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Gold has raced to an all-time high against the Australian dollar. There’s a loose triangle pattern in play. The target of that pattern is well above $2000.

It’s very important for gold stock enthusiasts to make some effort to own at least a few Australian gold stocks that trade on Australian markets. Many of these stocks have been in powerful uptrends for years and are likely in a new acceleration phase.

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