Recently, I presented an exclusive, online strategy briefing for Real Wealth Report members. Together, we looked at updated E-Wave cycle charts for several key markets. I discussed the current market trends in great detail, and my forecasts for those markets in the months ahead.
And, as always, I set aside plenty of time to answer your most-pressing questions. In fact, the Q-and-A is always my favorite part, as it was for my colleague Larry Edelson. It’s a great venue to hear and respond to your candid comments and questions.
Of course, due to time constraints, I wasn’t able to get to all your terrific member questions. So I will devote this month’s issue to recapping your most-pressing questions from my presentation. And give you my best answers to those and even more of your urgent questions.
So let’s dive right in with your queries about several key market trends starting with GOLD.
“When do you expect the Real Wealth Report will show a buy signal on gold and silver? The last info I got said it would probably be December 2017 to January 2018.” — Barry
I’m pleased to report that, yes, we are still on track for a sizeable year-end rally in gold and all precious metals. One that should carry them higher well into 2018.
In the June issue of Real Wealth Report, I showed you a longer-term cycle chart of gold that stretches into early 2018. It clearly indicates a strong rally coming up, probably starting in November or early December.
Here is a freshly updated E-Wave cycle chart for gold …
As you can see, the move higher in gold is nearly vertical going into February-March 2018. But please bear this in mind: The longer we peer into the future, the less-precise the forecast trends become. That’s perfectly understandable, because a lot can happen between now and then.
The optimal forecasting window is about three months, as Larry Edelson always instructed us. Therefore, I have higher confidence in the gold forecast from now through November. Which, as you can see, calls for a choppy downtrend to continue. Ditto for silver, platinum and other precious metals stocks.
But in November, expect a major low and key turning point to the upside for the precious metals. Bolstering my conviction here is the fact that we have powerful seasonal cycles also working in our favor at year-end.
Remember, we witnessed very similar rallies in gold in late 2015 and again late last year. From December 2015 through mid-2016, gold rallied about 30% higher.
And from December 2016 to the middle of this year, gold jumped another 15% in value. Right on cue with my forecast.
So it makes perfect sense to expect a repeat performance in gold again in 2017. Just as our E-Wave cycle chart predicts.
Keep in mind, the gold rally may well come from a lower level than today. Gold has been in a very choppy trading range for months. And we expect more of the same — sharp swings both up and down — through October. Gold hasn’t completely bottomed yet. So expect the next few months to be volatile without many trading opportunities.
Now, I know this is frustrating for many of you who want to back up the truck. But you simply cannot force the market to do what it’s not ready to do.
Mark my words, when the next big move higher comes … toward the end of the year and into 2018 … I expect gold to easily take out resistance above $1,300. Then it should move higher from there, and eventually break through the $1,400 level.
And this will really get the gold bulls’ attention.
For SILVER: The cycle forecast looks very similar to gold. They’re nearly identical. Sometimes silver leads to the upside; sometimes it lags a bit. That’s because silver is an industrial metal as well as a precious metal. Half the demand for silver globally is for electronics, high technology, medical imaging and other industrial uses. So silver is subjected to these forces, too.
However, the big moves up and down in gold always bring silver with it. And the moves in silver are typically more extreme than gold, both up and down.
That’s why I expect silver will undoubtedly outperform gold to the upside in this next big move. And mining stocks will most likely outperform both silver and gold.
Bottom line: Nothing has really changed since my last update on the precious metals. I realize it’s been frustrating as gold, silver and mining shares have bounced around in a choppy range, going nowhere. But I still expect the next major buying opportunity is coming soon, by the end of 2017.
And it will be a doozy of a rally, so your patience should be richly rewarded!
The next member question is about CRUDE OIL …
“What is the forecast for oil? The forecast keeps changing for the last several years. It was supposed to enter a new bull market after a short downturn, but never gets there.” — Ellie
Well Ellie, it’s true that our E-wave cycle forecasts for ALL markets are subject to change. That’s because the AI model Larry Edelson developed based on his long study of cycles is a neural net.
It literally learns from past successes and failures. And the model improves its ability to forecast trends. As new data becomes available and gets incorporated into the model, naturally the forecast turning dates can and do shift.
After all, you don’t want a static model that continues to predict the exact same outcome without taking into account new information. You want a model that’s adaptive, and can roll with the market’s punches.
That’s exactly what the E-Wave model Larry developed is designed to do.
Now, in terms of a bull market in OIL, we’re already there …
We saw crude oil bottom in 2016, and in the $20-a-barrel range. That was that … if we haven’t taken out that low by now, we’re not likely to. Oil hasn’t gone through the roof, either. But that’s the way markets work. They can be frustrating, with plenty of false starts —
just like gold since 2012.
Crude oil is the most-volatile market on earth. You can see plenty of sharp moves that make you question the trend. And you may not even realize when it’s entered a new bull market.
Oil is in a fresh uptrend now, but it’s not out of the woods just yet. Like gold, oil has critical resistance to overcome from roughly $52 to $55 a barrel.
However, we are approaching a bullish phase for crude oil according to our E-Wave cycles, as you can see below …
We should see an uptrend in oil start this month and continue into October. But then you’ll notice another decline into year-end. Again, more volatility.
The good news is a powerful rally phase should kick in early next year. One that takes crude prices substantially higher.
When that takes place, you’re going to see oil break right through resistance in the $50-a-barrel range, and quickly challenge $60. And you’re going to see the same powerful uptrend with energy-sector stocks.
This means we have not one, but two buying opportunities dead-ahead in crude oil and energy shares, which should be lucrative.
Again, choppy over the next few months, both up and down. But that pullback will be an excellent buying opportunity for the next leg higher in crude oil: First into October. And then, after another pullback, an even-stronger rally into next year.
It’s going to be a two-step rally. Volatile, just like gold, but ultimately very rewarding. Stay tuned for Flash Alerts with new energy-sector recommendations at any time.
Second only to gold, I get a LOT of mailbag question about MINING STOCKS …
“Please give us an updated probability for backing up the truck on miners.” — Edward
As I stated in my commentary on gold and silver, the next big buying opportunity is going to come later this year. That’s when gold is going to put in a major bottom, along with silver and the miners. And we’re going to see a substantial rally well into the first quarter of 2018. Take a look for yourself …
I expect gold to break finally break through resistance at $1,300-$1,350 an ounce, and hit new highs. Silver will likely outperform gold on the upside, as it typically does during big moves.
Miners will outperform both gold and silver to the upside, as they almost always do. So you can bet you will be getting the buy signal from me when it’s time to back up the truck later this year. I expect it will make a good Thanksgiving Day treat, or perhaps an early Christmas present, with a major cycle low forecast for late November to early December. Stay tuned!
Finally, a massive new COMMODITY bull market may already be underway …
“Larry often spoke of a massive commodity bull market in the near future. When do you see that beginning, and what will likely trigger it? — Dan
We’ve ALREADY started a new commodity bull market, in my view. We’re in the early stages of it right now.
The broad-based CRB Index comprises a basket of 19 commodities, and serves as an indicator of the global commodity markets. Some 39% is allocated to energy contracts, 41% to agriculture, 7% to precious metals and 13% to industrial metals.
Take a look at this CRB chart below. You’ll see that the long downtrend has broken to the upside. And it’s been propelled mainly by crude oil back above $50 a barrel, and also by gold closing in on $1,300 an ounce again. Meanwhile, the ags and industrial metals are likewise in sync to the upside.
Oil and gold should continue to push the CRB Index higher into 2018.
We’re also getting upside support from the grains: corn, wheat and soybeans. That’s due to droughts here in the U.S., and poor crop conditions elsewhere. Soft commodities like coffee and sugar have been performing better. Copper recently broke out to new highs as industrial production picks up, especially in China and other parts of emerging Asia. Steel and other industrial metals are rebounding.
So, the new commodity bull market is here. And yes, it probably will be a massive one that lasts for many years to come.
Remember, commodity bull markets, unlike a bull market in stocks, tend to be much longer-lasting. The typical stock bull market lasts anywhere from three to five years. If you get a supercycle bull run in stocks, it may be 10 years or more. Commodity bull markets have a much-longer cycle length, typically, 10 to 15 years or more. So this new commodity bull is still in the early innings now.
That covers many of the questions asking about our cycle forecasts for gold, oil, mining stocks and commodities. And in next month’s Real Wealth Report, I promise to cover the dollar, euro Treasury bonds, stocks and much more.
Basic Survival Strategies
Here is an update on your existing positions, including the three stocks you should have added last month …
FIRST, you were stopped out of Wheaton Precious Metals Corp. (WPM) just as we went to press this week when the stock triggered our sell-stop at $18.40. That’s unfortunate, because WPM is a well-managed streaming company, but it’s clearly underperforming its peers, and so I’m confident we can find better opportunities to invest these funds elsewhere.
SECOND, continue to hold your physical gold as recommended. If anything changes, or I decide you should hedge your current holdings, rest assured I will notify you immediately in a future issue, or via a Flash Alert if necessary.
THIRD, hold your Platinum Bullion (XPT) and Palladium Bullion (XPD).
FOURTH, for spot silver: You should have 5% of your Basic Survival Strategies funds invested in Silver Bullion (XAG). Hold.
FIFTH, last month you should have added three new stocks to your portfolio: Hecla Mining Co. (HL), EQT Corp. (EQT) and Hi-Crush Limited Partners LP (HCLP).
Also, continue holding …
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Your shares in IAMGOLD Corp. (IAG) with a good-till-canceled sell-stop at $3.05.
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Your shares in Goldcorp Inc. (GG) with a good-till-canceled sell-stop at $11.49.
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Your shares in Kinross Gold Corp. (KGC) with a good-till-canceled protective sell-stop at $2.25.
SIXTH, last month I recommended that you add three new high-quality, non-gold-focused mining stocks in the Basic Survival Strategies portfolio.
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Keep holding your shares in Freeport-McMoRan Inc. (FCX) with a good-till-canceled sell-stop at $9.20.
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Keep holding your shares in Cameco Corp. (CCJ) with a good-till-canceled sell-stop at $7.35.
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Keep holding your shares in Sibanye Gold Ltd. (SBGL) with a good-till-canceled sell-stop at $4.05.
SEVENTH, keep holding your shares in Vantiv Inc. (VNTV) with a good-till-canceled sell-stop at $49.74.
FINALLY, keep holding your shares in Textron Inc. (TXT) with a good-till-canceled sell-stop at $42.68.
If you’re not on board already with any of these positions, for whatever reason, see the position tracking table on page 8 to see what to do.