Gold: Is The Correction Over?

Is the price correction in gold already over? 

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I told investors to prepare for a modest and healthy correction from the $1300 area, and that’s happened.

Gold hasn’t even reached the first Fibonacci retracement line after staging a magnificent rally from the $1173 area. That’s a sign of immense technical strength.

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Silver has carved out a beautiful double bottom pattern. It’s now staging a textbook pullback to the neckline of that pattern.

Whether the precious metals market correction is over or has a bit further to go is not important. What matters is the fundamental picture. That picture is healthy, and it’s about to get exponentially healthier.

The odds of an import tax cut in the world’s most important gold market are higher now than at any point since the taxes were ramped up in 2012-2013.

“You need the Indians to buy oil or gold." - Jeff Currie, Global Head of Commodities Research, Goldman Sachs, Jan 16, 2019. Jeff says, “Buy commodities.

While senior citizens in the Western gold community may long for what is essentially a remake of the 1970s fear trade-oriented gold market, today’s gold market is mainly about the rise of gold as a respected asset class. That’s being created by the ongoing rise of China and India as economic titans.

Today’s Western fear trade for gold is more like icing on that cake than the center stage price driver that it was in the 1970s.

In a nutshell, a “goldaholic army” of three billion Chindian citizens is becoming wealthier at a very fast pace. That’s creating annual gold demand growth of 6%-8% that is essentially relentless. Mine supply can’t seem to grow more than 2%. 

It’s becoming a “no-brainer” that the gold price will rise consistently for decades to come, and probably for the next two centuries.

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