Since last year I waited for a major bull-run to start in Metals from Sep 2006. We are approaching toward to that period so I decided to write today’s message.
In writing this, I attempt to explain why I have been so negative in regard to metals for the short term and especially for the last five months, as well as being bullish on metals for the longer term. In an effort to suggest a way forward, it is also a guide as to what we should do and expect, especially for those who follow me.
Here are my prophecies on the unpredictable world financial market.
GOLD, SILVER AND OIL
From the TV interview of 2001 September, GATA and 321gold.com published my prophecies about metals, oil, the dollar as well as the global geo-political events for the first time in February 2002. At the time, my outlook for metals and the oil sector was very confident. Indeed, I stated that gold would first move towards $1000 after which it would then go towards $1600; silver $14 and then to $50 while oil would first attain $60, after which it could hit $100.
I made three important statements that reflected my view at that period:
1) That there would be a 52 Year great cycle for metals and other things that come from nature;
2) That the
3) The very real possibility of war situations developing between the USA and Iraq, the USA and IRAN war as well as the USA and N. Korea.
This is just a brief glimpse into my views (between 2001 and 2003) and it is clear that I was quite upbeat about gold and oil. At this stage, I am however filled with sadness for regrettably, I was terribly wrong on metals and oil, even though my long term views have remained the same (rising in metals and energy).
I am not one to run away due to a faulting of my name following a negative cycle. After deep meditation, I am once again writing my prophecies concerning metals, oil, currencies and the world’s geo-political situation.
As a matter of fact, we not yet late for
GOLD TO MOVE TOWARDS $1600, WHILE SILVER IS READY FOR $36, AND $50 THEREAFTER.
A cycle of Jupiter at the end of last year is what misguided me, otherwise I would have never have gone against my own prophecies of bullish metals. Indeed you may recollect how strongly I recommended buying metals.
It is a fact that we missed the 30% rally in gold as well as the 45% rally in silver. Gold is trading at $673 while silver is trading $14.44. We also know how risky trading commodities in the futures’ market is and the question is; should we start buying at this stage or would it be prudent to just wait?
Well, I still hold my prediction of buying metals from September 2006 as they will be entering into a historic bull-run market. This will be a very exciting period that will pale the current bull market in comparison- this is just a trailer. Remember that on many occasions I have mentioned the fact that a time is coming when gold will leap in bounds of $50 to $100 and silver $.50 to $2.00 in a single day. There are thrilling times ahead.
But before you can jump to amass metals, wait till the second week of September 2006, though those who prefer not to wait can accumulate options.
For this week I was wrong, an illustration that the Jupiter magic is not working at all- therefore stay away from short position in metals. If those still holds buying position in metals, then a 10% put option shall be a good idea. This is because there is a six weeks negative cycle still pending for metals from 18th May 2006. I must say that I am not at ease regarding this six weeks period and any sharp correction can damage portfolio heavily. It has to however take place and when it does, it should confirm a "HISTORIC BULL MARKET IN METALS"
In the longer term, buyers should not be scared as I see silver set to increase several folds. Gold could go up by 200%.
For the last two years oil has been continuously moving up. This is no cause for jubilation; it is a sign that all is not well in the oil industry. With oil currently trading around $75 a barrel, it looks scary at this point and it could hit $95 a barrel by end of 2006. Nevertheless, you should know that the oil bull market won't last many years, and that the fall will be quite drastic.
For the long term, it is safer to play in metals since "OIL’S BULL MARKET WILL END IN EARLY 2007". The sizzling period for oil is from 2002 to early 2007. Furthermore, the current period is quite uncertain for oil.
It is very difficult to describe the impact of soaring oil prices on the health of the world economy. Ultimately the effect can only be negative, a fact that is being expressed even by laymen. Surprisingly, most industrialists and economists have taken it as a matter of course and are not voicing this concern. At end of 2004 and early part of 2005, I recommended buying ALTERNATIVE ENERGY STOCKS. THEY HAVE DONE EXTREMELY WELL, a trend that is set to continue in the coming period.
One again, rising oil prices should be a source of worry. It is a sign of major financial turmoil in the world and world economy. Indeed, it is an issue which should not be ignored.
There is major uncertainty lurking ahead and economists, governors of central banks and even the Fed Chairman shall find it increasingly difficult to peg value on currencies.
All in all, I still don't see an overly negative period for the USD as all other currencies will crash dramatically during the coming uncertainty.
I intend not to focus on the short-term bear market for metals and instead get ready for a major bull market. HOWEVER, I WILL ONLY START BUYING GOLD AND SILVER FROM SEPTEMBER, AND THAT IS IF METALS ARE UNCERTAIN IN THE LAST WEEK OF MAY AND THE FIRST FOUR DAYS IN JUNE.
Elsewhere, I will keep buying Grains and Coffee.
OIL is only for a short six months period.
MOREOVER, I AM BACK WITH MY LONG-TERM PROPHECIES. I WOULD ALSO LIKE TO CONFIRM THAT NEXT YEAR, MY BOOK WILL BE COMING FOR SURE.
I WOULD ALSO LIKE TO URGE ONE NOT TO DWELL ON LOSING THE 35%
CLOSING SHORT-TERM OUTLOOK FOR THE NEXT THREE DAYS:
WE HAVE A GOOD BUYING
AS CONCERNS OIL, UNCERTAINTY IS THE WORD.
Tuesday and Wednesday (HALF DAY) metals haven't fallen down so avoid this week prediction on metals but still to me it looks negative and till 3rd of June I will not buy a single contract.
TO END WITH, MARS HAS CHANGED POSITION AND A NEGATIVE TREND WILL DEVELOP IN COPPER.
Thanks & GOD BLESS
DH. Mahendra Sharma