King World News has added commentary to go with the charts:  The chart below shows consolidations in gold since 2005 and the subsequent price moves higher.  You can see from the angle of the curve that the next trajectory move for gold should be above $3,000.  If you look at the move in gold following the first consolidation of 71 weeks, once gold broke out it advanced roughly 50%. 

After the second consolidation on the chart, which lasted 77 weeks, once gold broke out the advance was 90%.  If gold advances 50% after taking out of the recent all-time high, the projected target for the advance would be $2,880.  If gold sees a 90% move after the breakout, that would target $3,620.

The silver chart below shows the important moves and consolidations since the advance began in 2003.  Note that the last consolidation lasted 91 weeks.  After silver was then able to break out above the $21 resistance area, it subsequently advanced roughly 150%.  If silver were to replicate a move of that magnitude, after breaking the recent high of nearly $50, it would put the next target for silver at a staggering $125. 

The lesson here reminds me once again of the great quote from Jesse Livermore:

“And right here let me say one thing:  After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this:  It never was my thinking that made the big money for me.  It always was my sitting.  Got that?  My sitting tight!  It is no trick at all to be right on the market.  You always find lots of early bulls in bull markets and early bears in bear markets. 

I’ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit.  And their experience invariably matched mine – that is, they made no real money out of it.  Men who can both be right and sit tight are uncommon.  I found it one of the hardest things to learn.  But it is only after a stock operator has firmly grasped this that he can make big money.”

You have to buy into bull markets as early as possible and hold on to your position during violent gut wrenching corrections.  The very reason I have quoted Livermore so often is that few human beings have the capability to capture the vast majority of an entire bull move.  It takes incredible fortitude and discipline.

Some people may be concerned about the volatility in gold and silver and many of them will get shaken out of this bull market.  Somewhere down the road there will be a mania and investors will have to live through it one way or another, either holding positions or watching in despair as the bull market advances without them.

© 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 Michael Pento, Egon von Greyerz, Gerald Celente, Andrew Maguire, Roberto Giorgi, James Turk and Rick Rule are available now.  Also, be sure to listen to the other recent KWN interviews which included Nigel Farage, Chris Powell, Bill Fleckenstein, John Hathaway and Ben Davies by CLICKING HERE.

Eric King

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© 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.

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