Below is Fitzpatrick’s tremendous interview along with 4 key charts: 

Eric King:  “Tom, we are continuing to see these advances in gold and silver that you predicted would happen.  Let’s start with gold.”

Fitzpatrick:  “Yes.  Overall we are still of the view that what we saw was a very deep correction in secular bear market, but a correction nonetheless.  The platform which has now been established with the recent low, below $1,200, is going to be a platform for a substantial move higher....

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“The price of gold is now advancing above the area that really marked the breakdown point in gold.  This area is where gold has the rising trendline and the 55-month moving average.  These zones come in around the $1,390 to $1,405 levels.

So a monthly close back above that zone would suggest that gold is now undoing the longer-term break that was the catalyst for the move down below $1,200.  This will open up the gold price for a test of the really big break point, which was the area around $1,520 to $1,525. 

This $1,520 to $1,525 zone was pierced on the downside as the equity markets were hitting new all-time highs.  Regaining a strong foothold above that area would be the catalyst in terms of price that would signify gold has definitely reentered the bullish phase of its secular bull market (see chart below).


This break back above that key area ($1,525) would also open up the door for a move in gold toward the $1,790 to $1,800 price level (see chart above).  We still remain of the belief that gold will ultimately see new all-time highs during this strong move to the upside.

If you look at the long-term uptrend in gold since the base was established in 2001, the reality is that the moves have actually been very steady on the topside, which is also why it’s been such a strong trend.  There have been some strong corrections such as the 2008/2009 period, as well as what the gold market recently experienced, but the long-term trend still remains higher.

There are also event driven risks which could propel gold such as the turmoil in financial markets, and developments in the Middle-East.  They can create, as we’ve seen today, spikes within the trend, but the medium-to-long-term trend is still quite steady to the upside.”

Eric King:  “Tom, you had also predicted a big surge in the price of silver.  This is exactly what we have seen take place in the silver market.”

Fitzpatrick:  “Silver is still the one that looks like it should outperform.  Silver has advanced quite strongly and broken through some important moving averages.  So that opens the price of silver up to go and test the breakout point and the 200-day moving average, which have both converged around the $26 dollar area (see chart below).

More importantly, a break above the downward trendline from the 2011 highs, as well as the converged 55-and-200-week moving averages that stand in the area between $27 and $28, would be extremely bullish.  So, above that $27 to $28 area on a weekly closing basis would mark a firm breakout in the price of silver.

We are seeing all of this reflected in the gold/silver ratio.  The rising trendline coming in from 2011, and the horizontal supports that we crashed through in 2010 and 2011, have both been broken through now.  This strongly suggests that even from these levels silver will be outperforming gold.  We have seen the ratio of the move in silver vs gold be quite aggressive in all trending moves, and we firmly expect for that to continue.”

Fitzpatrick also added:  “Within the gold dynamic, we believe this recent correction was very similar to what the gold market witnessed from 1974 to 1976 -- as the equity markets recovered from the bear market bottom in 1974.  In this instance, very recently gold went 14% below the 55-month moving average, exactly as it did back in 1976.

After the low in gold in 1976, the equity market peaked 4 weeks later.  So far, following the $1,181 low in gold, the peak in the equity markets has been 5 weeks thereafter.  And as we started that historic upward movement in gold, beginning in 1976, this was also when the equity market peaked and went into a corrective phase, and that is when gold really came into its own.

So we believe we are back into that track where gold is the hard currency of choice, and we expect for this trend to accelerate going forward.  We still believe that in the next couple of years we will be looking at a gold price of around $3,500.  As the gold/silver ratio plummets near 30 (see chart below), this would also suggest a silver price above $100.”

© 2013 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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Eric King

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rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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