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Fitzpatrick:  “The move lower in Silver was more aggressive than that seen in Gold.  In fact, in both the trending moves higher and corrections lower, Silver has tended to move more than Gold.  As a consequence we would expect that Silver may well outperform on this next move up.  Good resistance is met at the prior breakdown point ($26-$26.40) and above here just below $28 (55-and-200-week moving averages).


Above this latter resistance would suggest that Silver could accelerate further within this move with the next good resistance levels at $35-37; 50; $37.50; $44.20 and ultimately close to $50.


 


Fitzpatrick also addressed the massive U.S. debt and how it will impact the gold market:  “It is no coincidence in our mind that these two have expanded together over the last 10-12 years.


 


As we continue to spend more than we earn and shift that liability to the next generation, Gold has shown itself to be a very effective hedge against that policy.


The recent “squeeze in Gold” has sent it significantly below this “stairway to hell” chart (Debt limit) which has continued higher.  As we said earlier, we do not believe that this fall in Gold will be sustainable and expect new highs in the trend eventually.  As we also said, we have retained a long-term target of about $3,500 for some time on this Gold price based on a comparison of this period and that seen in the 1970’s....


Continue reading the Tom Fitzpatrick piece below...




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“As we headed towards the last Presidential election there was a considered view in the markets that by the end of President Obama’s 2nd term the debt limit could be as high as $22 trillion.  Then we got the sequester, a more rosy economic outlook, tapering talk and all this has been forgotten.  For how long? 


The market dynamics above combined with the change of leadership at the Fed may well be “resurrecting that thought.”  If so, our 2nd favorite Gold chart comes into play. 


Gold and the US debt limit (Again, see chart below): So what would a debt limit of $22 trillion over the next 2-3 years suggest for the Gold price?




How about $3,500 (see chart below).




We firmly believe that the Gold correction has “run its course” and that much higher levels will be seen in the years ahead.”


© 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 This material may not be published, broadcast, rewritten, or redistributed.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.


The audio interviews with Art Cashin, James Turk, Eric Sprott, Egon von Greyerz, Michael Pento, James Dines, William Kaye, Grant Williams, Hugo Salinas Price, David Stockman and Marc Faber are available now. Also, other outstanding recent KWN interviews include Jim Grant and Felix Zulauf to listen CLICKING HERE.


Eric King

KingWorldNews.com

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