Tom Fitzpatrick continues:

“With the exception of 2008, when everything obviously came down together in a mass washout in financial markets, gold has never been able to really move down much below its 55 week moving average.  In every period it has done that, it’s been the platform for the next move higher.

We’ve done that again here, and the present pattern we look at is setup similarly to that of 2006 (see chart below).  In 2006 we had a similar type of consolidation and sideways moving pattern, which eventually gave way to a significant push to the topside.  We believe the same thing is happening again here.

We’ve already iterated a target in the more medium to long-term of $3,400, and over the next twelve months as high as $2,400.  We believe gold is now set up, with a bullish weekly reversal last week, to make its next move higher.

It might not explode in the near-term.... 

Continue reading the Tom Fitzpatrick interview below...


To hear which company $10 billion Sprott Asset Management and Sun Valley Gold

are the largest shareholders of and why click on the logo:

“It might be, initially, more gradual, but we are very biased to think gold is going significantly higher from here.”

KWN also asked Fitzpatrick about the fact that he is bullish on the US dollar, while at the same time being bullish on gold: “Yes we are.  The way we look at that is while there was a tendency to look at gold as a dollar view, the fact is that over the course of the last ten years gold has been pretty much going up against all paper currencies.

Gold happens to have been going up more against the dollar because the dollar, in that time period, has essentially been in a downtrend.  Our scenario is one where you might see the dollar and the euro switch places. 

We expect that gold will continue to go up against the dollar, but, over time, we expect it will go up even more against a currency like the euro.  So, it’s more of a switching of places of the paper currencies, but a bias to believe that gold is going to continue to outperform those paper currencies.

Also, in this dynamic where we are seeing a lot of paper printing, a lot of money printing and monetary experiments, gold is reverting to its true safe haven status, which is first and foremost as a hard currency.”

Fitzpatrick had this to say about oil:  “To us, the setup for oil here looks very much like what we saw before we started to see the push higher in 2008.  Also, looking at some of the long-term charts going back to the ‘70s, there is an amazing similarity to what we saw between 1973 and 1979, before the oil price pushed higher again, albeit during that occasion as a supply shock.

The present setup for us looks very bullish.  Oil has managed to hold its main support during the consolidation (see chart below).  We believe this will be resolved with a move to the topside that will test the all-time highs, and when we say that, we are particularly focused on Brent.

This setup suggests to us that we can probably retest and break through the all-time highs at $147.50.  We don’t think it’s inconceivable that we could go into the much higher $165 to $170, and possibly as high as $200 (per barrel).

It’s actually fairly consistent if you go back to the 1970s.  You’ll find that on two occasions, when the oil price was advancing, we got moves where the oil price virtually tripled.  We’ve already had that (type of advance) once in this cycle, during the move in 2008.  If the call is right, we really struggle to see how it can develop in any other way but a supply shock.”

© 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 Eric Sprott and Egon von Greyerz audio interviews are available now.  And be sure to listen to this week’s incredible line-up of other KWN interviews, which include Rich Yamarone, John Embry, Jim Sinclair and John Hathaway.  You can listen to these interviews by CLICKING HERE.

Eric King

To return to BLOG click here.

© 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.

Subscribe to RSS
KWN Blog