This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Get Ready for $1,200 an Ounce Gold

Not to be outdone with debt burdens, Japan has mortgaged everything down to the chopsticks for the remaining few in the next generation. Japan now sells more adult diapers than infant diapers as the population ages and the birth rate remains well below the replacement level needed. Japan, with well over 200% GDP debt level is near forced austerity, even if they don't admit it yet. The yen is near record strength against the dollar, a fall in the yen/dollar pair will, like the euro, result in bearish pressure on gold. Moving forward, increasingly anticipate Japan as a bearish catalyst for gold.

Energy

As I wrote in a recent article about oil leading the way for gold, falling energy prices are the final stake in the heart of inflation. The US Oil Trust (USO) continues to make 2012 lows. Everything in the world depends on cheap energy, and cheap energy is here. Please read my article Attention Gold Bulls: Oil Is Leading the Way for my outline of why lower energy prices have killed inflation fears.

Along with USO, natural gas is also at historic lows. Natural gas is so incredibly cheap, trucks are actively moving away from diesel and gas to burn natural gas. A quick review of the monthly US Natural Gas fund ETF (UNG) clearly indicates the current level of inflation fears.

I apply several proprietary technical analysis indicators as well as my favorites by Tom DeMark to arrive at price projections. I use several indicators for confirmation, and one relatively easy back-of-the-envelope method is described in Jason Perl's book DeMark Indicators. The high above the GLD monthly trend line is $185. Subtracting the value of the trend line for the same bar ($141) results in a difference of $44. Then subtract $44 difference from the trend line value at the price break. The price broke the trend line this month at about $158; $44 from $158 results in a price target of $114.

More convincing yet is the weekly and daily gold charts. Gold broke through this month and is now trading below the 60- and 90-week moving averages for the first time since January 2009. Look for moves higher in GDX, GDXJ, GLD, and IAU as selling/shorting opportunities.

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GDX $20.08 0.00%
GLD $115.00 0.00%
UNG $14.39 0.00%
AAPL $126.41 0.00%
FB $81.21 0.00%

Markets

DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs