Deception and Dishonesty in the Government Affect Gold Prices

August 5, 2013

8/3/2013 – Precious Metals Market Update


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Audio/Video Notes Below

It’s been quite a week and we’re now into August. This is very important as we talk about the seasonality of gold. There are several other things that are driving gold back up gradually. The first I want to talk about is one of the things that helped drive gold down and that is the yield and the treasury bond market.

Treasury Bond Market Falls, Good For Gold

There’s a TLT sign that the 20+ year treasury bond market has broken 9% now in a little over a month and a half. With that market going down 9%, clients that sold gold like a year ago and went into long term bonds, are now moving back into gold. So this is one important thing to remember. When treasuries break like they have, a 9% drop in TLTs, then it’s certainly something we’re very aware of.

A lot of the money doesn’t go to gold, but it does go somewhere. The other thing is we’re seeing the stock market have a $384 million call on those. It’s borrowed money, and that normally means an intermediate top that will also help gold. Plus, the seasonality of what we’re moving into.

Deception and Dishonesty

But the biggest thing, Jerry, that we want to talk about is what I started out talking about in May. Through pure deception and dishonesty, Lew, the head of the US Treasury has now said for four months that the budget has been balanced; that we went up $17 trillion in debt, which was the debt limit, and the government has been able to balance the budget for four months. But at the same time, Bernanke has just borrowed $53 million in new treasury purchases.

So we know it’s just creative bookkeeping, and we are going to have to deal with the debt ceiling. History tells us that as we’ve talked about and I’ve shown many times in charts, if they take and raise the debt ceiling from $17 trillion to $18.5 or $19 trillion as they’re expected to, we’re talking about gold with at least a 30% increase and probably more.

So, this will be dealt with this fall. Lew continues to deceive the public, and some say we haven’t had any debt in four months, that the government is bringing in enough money to pay for all its obligations. And yet, Bernanke, in the other door, is borrowing money and created $53 million new treasury bills out of thin air. Those just don’t jive.

Be ready, because once that happens, you’ll see gold jump $100 to $150 in a day or two or three, just like it did in August 2011 last time they raised the debt ceiling. That’s back on our radar screen as I told you earlier.

The Technical Side

There’s rumors out of Europe this week that central banks are now pricing hundreds of tons of gold similar to what was purchased back in late June of this year when there was a 580 ton purchase that turned out to be China and India, the two central banks that ended up buying that much back in June. So, we usually don’t find out who does it until after the fact, but there is a deal being made as we speak in Europe, so there’s a lot of very positive things going on for gold.

Now, silver remains in a neutral state. It’s not in a buy signal yet like gold and platinum and, for you listeners, we want you to know that silver is down a little over 20% and gold is down a little over 30% for the year 2013. But what we don’t talk about is that palladium is up 4.5% and platinum is up 3.5% for 2013. So, these metals are set to really explode.

Like you wrote in your briefing, Jerry, with the amount of money being printed at the Fed, we don’t expect to go down any in quantitative easing. We don’t expect them to cut back from $85 billion per month. In fact, we expect them to increase. Every sign that we are seeing is that they will actually increase the spending, and now that President Obama is interviewing and looking at some extremely liberal people possibly taking Bernanke’s job, I think we’re getting set up for that because so far everything that’s happened really hasn’t affected the economy to the good at all. It really hasn’t, it’s all just deception and mirrors.

So, we’re getting ready for a tremendous month. We think the last four or four and a half months of this year, starting somewhere in the middle of August will produce a potential for gold and silver both to gain enough that they don’t lose anything this year. So, what I’m saying is we expect gold to go up 20% by the end of the year, and silver over 30%. That may sound crazy, but that’s what we hear and that’s what we believe at this point.

So, it’s a great time to get into silver. It’s going to be a buy signal anytime, and we’ve got to get it to break to $20.50 and hold for 2 or 3 days. Then we should get a quick 10% move into the $22.50 to $23 per ounce range like we’re looking for.

Palladium, populations just keep requiring it. It looks extremely bullish to us, and we know there is a shortage out of Russia and South Africa. There are strikes in South Africa that are affecting that market. And platinum is a little bit similar to palladium, but I think palladium still has more run in it than the platinum does.

Gold Top Investment for Rest of 2013

I was talking to a major financial adviser yesterday, who is getting ready to move 10% more of his client’s money into gold in particular. He’s been in the business about 35 years, and says he sees gold without question the top investment for the rest of 2013, if you look at it from right now until the end of the year. So, hopefully, all of this will be helpful.

So, for those who need to talk to me, you can reach me at 800-247-2812, and if you would like to get our email blast, you can visit our precious metals page and sign up for our email blast that I send out 2 or 3 times a week. We keep your email completely confidential. We don’t share it with anyone. It tells you our specials, our operating hours, plus articles that we find pertinent to the market and precious metals.

With this week’s precious metals market update, this is Tom Cloud signing out.

 

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Six Month Silver Chart

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Six Month Palladium Chart

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