Dear CIGAs,
With gold and silver continuing on their historic run, the Godfather of newsletter writers Richard Russell had this to say in his latest commentary, “Gold — The desperate battle to keep gold below 1500 continues. I watched the erratic action of gold near yesterday’s close. I’m fascinated to see whether June gold can close above 1500 or whether the anti-gold contingent can manage to knock gold down (again) below 1500.
The action is now so blatant that it literally screams of manipulation. At its high yesterday, June gold sold at 1506.50. At yesterday’s close, June gold was trading at 1498.10. It’s almost embarrassing to watch the action. What we’re seeing is the anti-gold crowd and the manipulators vs. the great primary trend of gold.”
Russell continues:
“I’ve tried to emphasize this, but the key here is PURCHASING POWER. When the dollar price of a loaf of bread rises from $1.90 to $2.10 that means something to the average American. But when the Dollar Index drops from 75 to 73.97 the average American doesn’t understand it and isn’t the least bit interested.
Why the battle to keep gold below 1500? Markets tend to stop at big even numbers. Many of us old timers remember the battle of "Dow one thousand." We remember how the Dow fought month after month to close decisively above 1,000. Then, once above 1,000 the Dow was on its way to 2,000, 3,000, 4,000 and finally 5,000. From there the Dow battled to move above 5,000 — on its way to 10,000.
The battle about gold closing above 1500 is that once above 1500, technically gold will be on its way to 2,000. And from there 5,000 will be the target. So 1500 is a psychological barrier that, from the bull’s standpoint, must be bettered. But from the anti-gold crowd’s standpoint, gold must be held (on a closing basis) below 1500.
The answer: As I see it, the primary trend of gold remains bullish. In due time, gold will gather the strength to close above 1500. The gold-bears will be defeated. It’s only a matter of time.
The Coming Gold Tsunami — We’re moving nearer and nearer to the edge of the hurricane. I can feel it in my bones. Every newspaper now carries an ad for gold.
Is there a gold bubble? Are you kidding me? Here’s an ad that somebody paid for suggesting that people should turn in their gold (!!) for Federal Reserve Notes. They’re not telling you to buy gold during one of the greatest bull markets in history — hardly, they’re asking you to throw parties in which the object is to get ignorant people to SELL their gold.
I can feel them caressing my face — the early breezes. They are blowing gently and hinting of the forthcoming gold hurricane that will sweep across the US and the planet with all the force and power that was seen when gold was first discovered at Sutter’s Creek during the California gold rush of 1849. The gold rush of the 2000s is in the wings. The old phrase is ringing in my ears again (I haven’t heard it since the late ’70s), "There’s no fever like gold fever."
