The Gold Report: In early 2012, Roger, you predicted that the price of gold would rise to over $2,000/ounce ($2,000/oz) during the year. But as the overall stock market increased in value, the yellow metal went in the opposite direction. What happened?
Roger Wiegand: Two things happened. First, the last gold peak almost made it. It went to $1,923/oz, and that was a technical and fundamental top. Then it sold down. The other thing that happened is that the U.S. Treasury intentionally sold gold to protect the stock and bond markets. Treasury feared that if gold ran up too high too quickly, people would dump securities en masse.
We are in the seasonal cycle when many markets go sideways. We have seen the selloff at the end of last week. A triple bottom is extremely bullish. The snap back in the price going long could be impressive.
TGR: What factors are keeping gold down in the near term?
RW: Gold is taking a pounding since the big bullion banks have full control and they have to cover their radical short positions taken at the behest of the FOMC and U.S. Treasury to preserve the fiat markets. Briefly, they kept the gold market under control to prevent a runaway for the FOMC and are now using TARP bank capital and derivative dollars to drive gold to the basement. Next, they are accumulating all the gold bullion they can to preserve their wealth in the forthcoming legendary crash. In addition, they get to buy it on the cheap as the dumb money is in full exit in fear.
Also, China, South Korea and Japan have problems and each central bank is dealing American bonds. Recently, China sold American paper through its own markets in order to offload Treasury bonds for currency. All kinds of problems are looming in China; some experts claim that China's export trade numbers are only half of what was actually reported. South Korea is clearly weakening, and Japan is experiencing an emergency, causing it to stimulate at twice Mr. Bernanke's rate. That is simply unsustainable. Japan is the Achilles heel of the whole financial system. If the yen runs away, it's a disaster.
What does that mean for gold? Starting in August, the price will likely rise until the end of September. Then harsh political and economic factors will create serious problems in the global markets: I'm calling for a 50% correction in the U.S. stock markets in Q4/13.
TGR: In your June 6 newsletter, you said that we are on the verge of a brand new world.
RW: The brand new world is imminent because the lessons of 2008 were not learned. The banks are doing the same bad things they were doing before the crash, only worse. The derivative markets are larger now than they were back then. A huge number of student loans might well be written off. And the real estate market is doing a rerun. Incredible! People with foreclosures who may not be qualified for a new mortgage are receiving Federal Housing Authority-insured loans in a desperate effort to try to prop up the home loan industry, which is a major sector of the U.S. economy.
We are in a depression, not a recession. The real numbers for unemployment in the U.S. are 25%. They were 25% in the 1930s. In Spain, 54% of the workers under age 25 are unemployed. The down-the-hill slide is global and in slow motion. People still believe a lot of media nonsense, but this market simply has not corrected. The ultimate jobs program will be a new war.
TGR: Where do you think a war will break out, Roger?
RW: Iraq is cranking up for another round. War is on the agenda in Turkey. Libya has bad problems, not to mention the horror that is Syria. China is beating a war drum, but that's just talk. North Korea is not capable of going to war. But more wars over energy resources will continue to break out in the Middle East.
War creates jobs. World War II ended the Depression of the 1930s. I don't think there will be a nuclear war, but three or four conventional wars can go on simultaneously, hire a lot of people, square away the economy and get things righted in the bond market.
TGR: Given such a dismal scenario, how will that affect the price of bullion and shares in gold mining firms?
RW: In the short term, gold and silver shares will follow the futures and cash markets. We are still in a corrective phase, which can last for another six weeks. But once gold and silver start to climb, the shares will follow. It's a big mistake right now for people to unload shares in good junior companies just because the stock has been beaten down. The companies with good fundamentals and enough cash to sustain operations for the next two to three years are going to do better. Look for good management with a project next door to a senior that is going to buy out reserves. Cash-starved greenfield juniors out in the middle of nowhere with no senior around to buy them out will not make it. It is like the salmon going upstream some fish fall by the stream side, some make it home to nest.
TGR: What technical tools do you use to analyze the future of gold?
RW: I look at the Market Vectors Junior Gold Miners ETF (GDXJ), which is the Index for the juniors group. Right now, the graph of that technical tool looks like an upside down head and shoulders, and that's very bullish. It is going to take a few more weeks for the junior stocks to pick up steam.
TGR: Do you have any junior names that meet your criteria for success?
RW: Watch California Gold Mining Inc. (CGM:TSX.V) at $0.08/share. The company has top management from Northern Gold Mining Inc. (NGM:TSX.V). It is located in a region with gold mining activity historically. Six mines are in various stages at that location. California Gold Mining stock had a low of $0.03 and a high of $0.24/share. Technically, we add the high and low and divide by two and find a 50% retracement. That is half of $0.27 or almost $0.14. The company has money and it has strong backers.
One of the standards out there that has been very good to our readers for the last four years is Timmins Gold Corp. (TMM:TSX; TGD:NYSE.MKT). It is a steady play, always on the upswing. When the futures and the cash markets rise, Timmons runs alongside. The near-term price is between $2.50 and $2.75/share. We're looking at $2.85 to $3/share in the next 3060 days, roughly.
We have followed Canasil Resources Inc. (CLZ:TSX.V) for years. It is trading around $0.055/share. Rounding to $0.06, we are looking at $0.125 as a goal within 90 days. A key point with Canasil is it is primarily a silver exploring company in northern Mexico. Its partner is MAG Silver Corp. (MAG:TSX; MVG:NYSE), and the two companies just signed a partnership agreement, expanding a major project with an injection of several million dollars. MAG Silver has a lot of capital. MAG Silver's Peter Megaw is one of the top geologists in the business. He told me that the company plans to build a 100 million ounce silver reserve and make it as big as the biggest of the precious metal mines in Mexico. So far, it is doing exactly that. Canasil also has some wonderful projects in British Columbia that just got permits.
At Trader Tracks, we like Santacruz Silver Mining Ltd. (SCZ:TSX.V; 1SZ:FSE) at CA$1.15/share. We are looking for a 50% retracement back to CA$1.75/share.
And there is Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) in Nevada, right next door to Newmont Mining Corp. (NEM:NYSE). The chief geologist for Newmont has done the exploratory work and the results look good. The firm's shares have big support by some very wealthy investors and are going up. The price was down to CA$0.50/share in May, and it is at CA$0.67 today. Gold Standard Ventures is the perfect example of a company that is building good reserves next door to a senior that, in my opinion, is going to buy it out.
One of our old favorites is Hecla Mining Co. (HL:NYSE). Today, it is at $2.79/share. The company went through a spate of problems during the last three years. But after settling a lawsuit with the Environmental Protection Agency, it expanded the Lucky Friday mine in Idaho. It bought out Rio Tinto Plc's (RIO:NYSE; RIO:ASX) partnership shares there. It now totally owns the Greens Creek project on Admiralty Island in Alaska, which has a silver life of 50 years. That island mine was running on electricity generators, and now it is connected by wire to the mainland. Hecla has been busy with a gold mine in northern Mexico in an area that is very rich, with four seniors operating in the region. We are looking for a high of $4.88/share in three to six months. Hecla's stock likes to go to $8 or $9/share, and then retreat on a correction.
TGR: Roger, can you tell us what kind of technical information you look at to come up with your recommendations?
RW: I am mainly a chartist and a technician, but one cannot neglect the fundamentals, particularly considering the state of political economy in the world. First off, does a firm have good management? Is it located in an area that's politically reliable? Does it have expertise in engineering and geology? Then, we look at valuations.
Remember, if you want to find gold or silver, go where the old mines have been prolific. Just because a lot of ore has been pulled out successfully does not mean that there is not more there to be mined. California Gold is a perfect example. The two big mines that Hecla runs in Idaho and Alaska are examples. The old mines in northern Mexico are loaded with silver. First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE) is an intermediate-size miner in Mexico that has done exceedingly well. Its stock is lofty in price, but the company continues to prove its way down the road and make money by expanding the business.
After assessing the fundamentals, we examine the technical side with a long-range chart of 5 or 10 years. Then we narrow it down to a one-year chart. We next narrow it down to the cycles. Historically, gold and silver do very well between Nov. 1 through April. From May through mid-August, everything slows down. The annual fall rallies start the second or third week of August and run until the middle of October. Traders and investors in gold and silver know that the two big contracts in Q4 for gold and silver are the December futures, and they expire in November.
TGR: The futures explain the cycles?
RW: Yes. August gold is not that big a deal. December is the really big one for gold. In silver, March is the big one. July is less important. September is big because it's in the middle of the peak season going higher. The other big cycle for silver is December. So keep these cycles in mind when trading and investing. Those are the times of year a trader or investor with average experience can profit from quantification. Chart the time of year when prices consistently bottom out and then start to rise.
TGR: Any junior names for us outside of North America?
RW: We follow Global Minerals Ltd. (CTG:TSX.V; DPF:FSE) in Slovakia. It has great reserves. It is a previously exploited, proven mine. Slovakia is a business-friendly, Westernized country with all the big auto and consumer companies operating there. Global Minerals had a dewatering project that went on for about eight months. The pumping is completed, and the engineers and geologists are working at the 3,000-foot level, doing the exploratory work for the next move.
TGR: Do you own stock in Global Minerals?
RW: I trade futures and commodities. Because I recommend stocks for the Trader Tracks newsletter, ethically I cannot buy them. That breaks my heart, sometimes, because I've seen some dandies that I knew were going to do well. But I personally trade futures in gold, silver, currencies, the energy sector and grains.
TGR: Any parting advice, Roger?
RW: Please have patience, gold investors. Some analysts are predicting crazy numbers, like $900/oz. Not me.
TGR: Thanks, Roger.
Roger Wiegandaka Traderrogproduces Trader Tracks newsletter to provide investors with short-term buy and sell recommendations and give them insights into political and economic factors that drive markets. After 25 years in real estate, Wiegand has devoted intensive research time to the precious metals, currency, energy and financial market for more than 18 years. He creates a weekly column for Jay Taylor's Gold, Energy Tech Stocks newsletter.
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DISCLOSURE:
1) Peter Byrne conducted this interview for The Gold Report and provides services to The Gold Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Gold Report: Timmins Gold Corp., MAG Silver Corp., Santacruz Silver Mining Ltd., Gold Standard Ventures Corp. and Global Minerals Ltd. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Roger Wiegand: I or my family own shares of the following companies mentioned in this interview: None. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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Enjoyed the article,thanks
Why does anyone listen to these people who have no credibility left and continue with their gold price propaganda. This gentleman seems to have proven that he is no better at predicting gold prices than a 10 year old child throwing a dart at a board full of numbers.
This is part of what Mr Weigand said in an interview with the Gold Report published 15 FEB 2012 as referred to in the above article.
"Gold is coming back very strongly right now. People in India, China, Japan and Canada are buying lots of physical gold. In addition, some central banks that were selling gold are now buyers.
We anticipate two more rallies between now and the end of April (2012). On the six-week rallies, we should go up to $1,807/ounce (oz), then pull back, then go up to $1,923/oz, then pull back, and go on up to $2,050/oz by June(2012)".
AND
"Consider gold as an investment during an adjustment. If gold goes to $2,450/oz by the end of 2012 or early 2013, there will be normal, profit-taking correction. When that happens, the gold price could drop back to $1,920/oz. People will say that is the end of the gold market. Not true. It would be just another correction that happens to be wider than previous corrections. We have repeatedly reported the precious metals would trade with more volatility and wider daily trading ranges, and when a correction arrives, it would be large."
Well sir. You could not have been more wrong but the same song was being sung by many other gold proponents at that time. I fear that unfortunately there are people out there that took this to be a reliable guide to investing in gold are are now sitting on heavy losses. (Obviously I was not one of them).
Now you are asked:
"In early 2012, Roger, you predicted that the price of gold would rise to over $2,000/ounce ($2,000/oz) during the year. But as the overall stock market increased in value, the yellow metal went in the opposite direction. What happened?"
What happened is that Mr Weigand made a very faulty prediction. This simply demontrates that he and his many overly optimistic gold bug counterparts (that continue to seemingly suggest to people that they have some abilty to predict gold market prices ) apparently have zero abilty whatsoever to do so. When markets do not perform as they predict they seem to come up with all the typical excuses that the gold proponents all run in tandem.
Like this one:
"RW.....Gold is taking a pounding since the big bullion banks have full control and they have to cover their radical short positions taken at the behest of the FOMC and U.S. Treasury to preserve the fiat markets. Briefly, they kept the gold market under control to prevent a runaway for the FOMC and are now using TARP bank capital and derivative dollars to drive gold to the basement. Next, they are accumulating all the gold bullion they can to preserve their wealth in the forthcoming legendary crash. In addition, they get to buy it on the cheap as the dumb money is in full exit in fear."
So the FED and US Treasury were quite happy to see gold prices explode from under USD400 to USD1900 in under 10 years but now that it is far lower than that they are trying to get the banks to manipulate the price "to preserve the fiat markets".
Concrete and conclusive evidence please. Do not just make these statements without conclusive evidence and so far I have never seen any of these people running with this same line produce any either. If the FED and Treasury were really so concerned about the value of the dollar we would not be having the excessive QE actions we have seen in the past which have been designed in part to specifically lower the dollar and promote US exports. Whatever price the gold speculators manage to push the gold to, this will not smash the fiat markets as it did not when it exploded to 1900. This myth that the FED and US Government are really that overly concerned and obsessed about the gold price is constantly run out by the gold bugs but does not stand up to scrutiny. Perhaps the FED and Treasury thought that none of this liquidity that was being released by QEs would find its way into gold but into every other major asset class instead. Hardly. Furthermore any "radical short positions" as are alleged here need to covered at some point with "radical" buys.
Now you proclaim:
"RW...What does that mean for gold? Starting in August, the price will likely rise until the end of September. Then harsh political and economic factors will create serious problems in the global markets: I'm calling for a 50% correction in the U.S. stock markets in Q4/13."
This gold price "guess" is as good as the guess you made last year. You do not know what will happen to the gold price later this year just as you did not last year.
Furthermore if there is indeed a major sell off in capital markets which sees stock markets decline by 50% history suggests that the gold price will most likely take a hit just as it did in the last major financial crisis sell off. If you also think that gold stocks will break out to the upside while the rest of the stock market collapses to the tune of 50% then you should look at history.
I note that the disclosure information at the bottom of the article does not mention whether or not the interviewee has a substantial investment in physical gold currently.
I am one of that few analyst, who predicted Gold Fall, with specific down Targets up to $1 1200, and that is too, quite early, since September 2012. Between September 2012 up to February 2013, again and again i had given such warning signals, however, at that juncture, nobody want to accept it, even just as possibility.
He may be right about one thing, though; it's not just goldman sachs etc. that is manipulating the gold price, but the fed as well...
Billion dollar's Question is that is it possible for Goldman or any one else, to manipulate without support or involvement of fed?????
Dear Roger,
First i must ask you that did you have ever check-up the impacts or end results of cocktail of Technical studies added with History reference? and have you noticed about so many factorial changes taken place or are you aware of many strange or under laying factors like Paper Gold, ETF etc. which are not found in History but now a days they governing Gold Prices? and also which have no concern with so called fundamentals.
Secondly, if you are talking about Technical Studies, then and then Since Mid October, there were so many bear signals appeared in Gold, have you predicted the same?
Next, Did you have identified any specific applicable signs of reversal or turn around signals from recent Gold movement? Wisdom tell us that we have to follow charts, chart will never follow us or over beliefs.
Finally, possibilities are always endless so we must accept probabilities of all such down levels like 1000, 800 or even any laser numbers too.
Mr. Roger,
Are you aware of under laying factors, which are governing Gold Prices? also which have no concern or reflect in so called Fundamentals.
Second thing if you are going with Technical studies, are you aware that Gold has indicated many Bear signals since Mid October 2012? did you have predicted the same? you may check my earlier posts of that period.
Do you have ever check-up effect or end results of cocktail of Technical, as well Fundamental Studies and over and above History added there in, spoil all together.?
And Finally, did you have find any applicable sign of reversal or Turn around signal from recent move of Gold? possibilities are always endless so we must ready to accept possibilities of all such down levels like 1000, 800 or even laser numbers.
Sorry, but this myth is WRONG: "World War II ended the Depression of the 1930s."
What the War did was to divert the recovering economy into the false prosperity of armaments industries, which unlike construction, farming, and other true value-added means of real wealth and production, enriches the elites while sacrificing the 90% beneath them.
This fellow may be good on gold, but not much as an historian, economic or otherwise. If war was good for business or a nation, it is 'good' only as derivatives and other non-productive speculations can be said to be 'good'. More lies from the banksters and the Fed Res Bunco.
my prediction gold goes to $560 and maybe $540 per ounce
He can predict anything he wants, but he failed to predict the current predicament, failed to predict that a lot of mining stocks would collapse 50-80% and that gold would be in a bear market.
Because of that, his credibility for further predictions is shot to hell, he has plenty of company.
Dear Sparrows 345,
Remember my friend, when i warned about gold, in November 1912, well in advance, about Gold Burst, which actually taken place just as my predictions at that point, you have replied me like :-
Sparrows345 says:
November 24, 2012 at 4:45 am
No one understands you.
Cover your short position, 'k' ?
not only you, but many people reacts in a same manner.
Anyway i agree with your present post, most analyst failed, totally failed to predict Gold Fall, and without finding any further confirm clue, still predicting bull run again, and i am surprised to find that when bear face continued, no any bull signal available, then on which ground analyst found such assumption, only based on certain probabilities?