Gold: Two Possible Scenarios Post-U.S. Election
As early as mid-summer, I was suggesting the precious metals sector would remain in “lockdown” until after the election, and this has proven correct. I also pointed out the ongoing, massive short (paper) selling of gold would contain the attempted breakout by gold bullion at $1,360 an ounce. I also said those bent on beating down gold would not be completely happy until they pushed the price of gold below $1,300 an ounce and thus triggered “cascade selling” as stop-limits were hit. This has proven correct too.
In mid-October, I said after the most recent smash in the price of gold that the bottom was in and accumulation was warranted. (Especially for those who missed the entry in January 2016). So far this call is looking good.
There are two main scenarios at play here: The first is that the precious metals sector will move slowly back to equilibrium, fighting the usual headwinds. The other is that with the election done and won (more on this below), the “reset” talks I have often talked about will resume, and gold will gradually creep into the news as a potential part of a new monetary system.
The first scenario means a gradual but steady gain in the price of the gold miner stocks. The second (which has at least a 50-50 probability) means a lot more upside action into the New Year. As for the election, we note that in over four decades of reporting, your editor has generally stayed away from political coverage. This year I made an exception. Why? Because, and I admit strong feelings on this topic, for the first time ever, an enormous amount of “alternative” information was made available via the Internet for those with the desire to look.
In the last couple of weeks alone, Wikileaks released over 14,000 e-mails. If ever there was a way to grasp what a candidate REALLY thinks, this was it. The most distressing thing I noticed was that the vast majority of voters simply did not bother to explore this source. Instead, they relied on the mainstream media.
As reported in ZeroHedge last week, a close confidant of George Soros recently commented that “while Donald Trump may win the popular vote, the Hillary Clinton presidency is already a done deal.” This brings to mind the comment that, over the years, cynics have made about democracy. Over time, they say, voters invariably get precisely the government they deserve. I agree.