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Here is what top Citi analyst Fitzpatrick had to say, along with some powerful charts: “As we pointed out in our previous interview, we had the three consecutive weeks where gold tried the $1,791 level, which was our big pivot. A break and weekly close above $1,791 would have set the gold market up for a rapid advance higher.
The reason we called for caution at the top of the recent trading range was directly related to the three consecutive failures to make any real headway above that critical level. We then made the call for a correction in our last couple of interviews and that turned out to be very timely as the reaction soon materialized....
Continue reading the Tom Fitzpatrick interview below...
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“But at the end of the day, our base case scenario is that this correction is likely to take us to to a 50% retracement of the up-move, and down to the 200-day moving average. Both of those areas are coming in right around $1,661 to $1,663 (see chart below).
You also have the 55-week moving average coming in down in the low $1,660s as well. So we may well continue to see corrective activity in the gold market as it consolidates this up-move, but that $1,660 to $1,670 should be pretty good support.
We are still very much on the page that there has not been a blowoff like there was in late 1979 and early 1980, and like you see in a lot of markets in the final move. We see nothing like that in gold at the moment.
So you have the two groups that are out there right now. You have the group that is taking the gold on board and not putting it back into the marketplace. These are the long-term players such as Eastern central banks. Then you have the short-term traders, and this correction we are getting is much more to do with those short-term traders.
The bottom line here is that to get a really serious correction in the gold market, it would have to come from extremely serious external factors, and we don’t believe that is very likely, especially with all of the liquidity sloshing around the world financial system.
So we really have no concerns in the big picture as long as the $1,525 area (see chart below), which has held a number of times on gold, continues to be the floor. We still think at the end of the day that the platform is set up for significantly higher gold prices next year.
What people have to realize here is this correction may have already given the best buying opportunity. Regardless, we still believe this is a similar scenario to what unfolded in the gold market 5 or 6 years ago, and if that turns out to be the case, gold is set up for a massive move to the upside into Q1 and Q2 of 2013.”
Fitzpatrick had this to say regarding silver: “The area I had previously mentioned to you on silver, and we didn’t get too far away from it, was around $31.25. We’ve already been down close to that, in and around the $31.50 area. If we do a similar 50% retracement, we could possibly see $30.75. So we may see the $30.75 to $31.25 area, but it certainly does not have to go there. That would be equivalent to gold hitting the $1,660 to $1,675 area.
Again, silver, like gold, may possibly have already given the best buying opportunity of this reaction. But if silver and gold make it to those lower targets, they will most likely be represent outstanding buy points. We’ll have to wait and see how this situation unfolds.”
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
The interviews with Gerald Celente, MEP Nigel Farage, Dr. Stephen Leeb, Rick Rule, James Turk, Jean-Marie Eveillard and Bill Fleckenstein are available now. Also, be sure to listen to other recent KWN interviews which included, Art Cashin (UBS $612 billion), Jeffrey Saut (R.J. $360 billion) and John Embry by CLICKING HERE.
Eric King
What To Expect With Gold Assaulting $1,700 & Silver At $32
Today Tom Fitzpatrick spoke with King World News about the recent action in both gold and silver. Fitzpatrick has been astonishingly accurate in forecasting the movements of gold and silver. With remarkable precision, he called the entire move from the low $1,500s, to the highs right at his $1,791 target. Fitzpatrick then turned bearish at the dead highs, calling for a reaction. Now Fitzpzatrick lets KWN readers know what to expect next.
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
October 26, 2012
