The Future of Gold Prices
The Future of Gold Prices:
How Rule 15.2 Can Make You an Additional 66% in Gold
A Taipan Publishing Group Strategy Report
by Christian DeHaemer, Senior Research Analyst, Taipan Publishing Group
Nervous investors scrambling for a safe harbor have traditionally turned to gold for relief. But people who got caught in the stock market may worry that it’s too late for gold -- that gold prices have already peaked and they missed their opportunity.
Well, a little-known trading secret called Rule 15.2 can show you why gold is still one of the best bargains for investors. Rule 15.2 points the way to even higher gold prices in the coming months, giving worried investors some well-deserved breathing space.
Chances are you’ve never heard of Rule 15.2, and that’s understandable. Rule 15.2 is used mostly by expert commodities traders. It’s proven to be an extremely reliable indicator.
So if you’re interested in seeking safety in gold, Rule 15.2 is ready to deliver you excellent news. Even though gold continues to rally, you can still expect a 66% price jump.
The Future of Gold Prices: The Flight to Gold
Rule 15.2 doesn’t go as far as actually predicting when the prices will rise (or fall). But a good bet is that the American economy is in a prolonged free fall. Bottom line?
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Gold could spike sooner than expected. That means you still have time to make money in gold, provided you act now.
The current flight to gold catapulted the price from about $650 per ounce to nearly $900 over the past 12 months for a stellar gain of 38.4%.
With the slipping dollar, rising oil and run-away inflation, gold could be the last safe harbor for investors who got battered during the past year.
And there were plenty of them…
Some got trapped in the quicksand of the S&P 500, sinking to a 4% loss. The Amex proved more resilient by gaining 9% during the same 12 months (but that’s a pittance compared to gold). And despite the chatter about tech making a comeback, the tech-heavy Nasdaq actually inched down from 2,463.9 to 2,417.5 in the past 12 months.
That made gold the obvious place to invest -- at least for investors familiar with Rule 15.2.
The Future of Gold Prices and Oil
What makes Rule 15.2 such a reliable indicator? It all has to do with the correlation between the price of oil and the price of gold.
The sibling relationship between gold and oil prices took hold in 1971, when President Nixon decoupled gold from the dollar. To fill that vacuum, a gold-to-oil ratio seemed like a logical way to go. Today, Rule 15.2 is invaluable.
When you consider the global commodities boom, the jihad against the West and our sputtering U.S. economy, Rule 15.2 takes on the status of a market oracle in a world gone mad.
When you think there’s no place else to turn, Rule 15.2 is a constant that puts your investment opportunities into clear perspective.
Here’s why Rule 15.2 has been so successful.
One of the Best-Kept Secrets about The Future of Gold Prices
Rule 15.2 says that you should be able to buy 15.2 barrels of crude with 1 ounce of gold. Track that ratio and you can accurately predict the prices of both oil and gold.
What does that mean in today’s market? As oil hits $100 per barrel, gold should be selling for about $1,500 per ounce. Since gold currently sells for around $900 per ounce, Rule 15.2 expects gold to rise 66%.
It all makes sense…
While oil bolted nearly 80% in the past 12 months, gold appreciated less than half as much. The potential upside in gold is enormous, simply based on the recognition that the age of cheap oil is over.
Despite billions being spent on oil exploration, there have been no major discoveries in decades. Existing fields are being pumped to death. All the low-hanging fruit is virtually gone.
The result? Oil is going to get more and more expensive to find -- translating into higher gold prices. The economic forces pushing oil to new highs appear irreversible.
The Future of Gold Prices, Oil and Emerging Markets
Oil production has remained stagnant since the end of 2005, at around 85 million barrels per day. Sure, there’s about 1 trillion barrels of proven reserves around the world. But future consumption is going to outstrip it.
China, Brazil, India and other emerging economies are celebrating their success by gulping oil as though it were free champagne.
A new middle class is ballooning in third-world countries that are awash in money from the commodities being extracted within their borders.
For the first time, the worldwide commodities boom has finally made these countries independent of the economic influence exerted by the U.S. and Europe. Those old colonial days truly are history.
At an economic summit in London on September 24, 2007, Mr. Supachai Panitchpakdi, secretary-general of the United Nations Conference on Trade and Development, told an audience, “Emerging markets are at the centre of the new world economic landscape. Their rising economic clout and political power have global implications, particularly where trade and investment are concerned. Business and government leaders are beginning to reconsider conventional wisdom and develop strategies and policies to address the new challenges.”
The Future of Gold Prices: Energy Hogs and Gold
Now that the third world is achieving financial independence, the collective goal is to become the next economic powerhouse. As folks in these countries make more money, they’ll want what everyone wants: cars, air conditioners and flat-screen TVs.
Countries that were once frugal with energy (they had no choice) are turning into big, fat energy hogs.
The Paris-based International Energy Agency paints a frightening picture that could indirectly send gold skyrocketing.
The demand for oil could reach 116 million barrels per day by 2030, up from about 85 million barrels in 2007. Oil consumption will increase 55% between 2005 and 2030, with nearly half that growth coming from China and India.
Fundamental market dynamics clearly indicate that the price of oil has a one-way ticket to the moon. Prices will climb astronomically.
And according to Rule 15.2, gold will be along for the ride.
The StreetTracks Gold Shares ETF (GLD: NYSE) is the best way to play the rise in gold prices, hands down.
The GLD ETF is directly tied to gold prices without touching gold futures or any mining companies. You can trade this vehicle just like a stock.
This is the perfect time to get in. In fact, it may be the only time you'll see gold this cheap in a very, very long time. That makes GLD highly attractive.
Gold demand will continue to surge. As Rule 15.2 tell is, you can expect a 66% price surge. Don’t get left behind. Gold is the only way to go!
When this opportunity hits the news, it could be too late to reap the earliest and biggest gains that come with a first-move advantage. Our analysts here at Taipan Daily have reported from Russia, Thailand, Albania, Peru, and many other investment hot spots overlooked by Wall Street. They can show you how to turn “crisis” situations like these into lasting wealth. Get in on these opportunities now. Sign up for your FREE Taipan Daily e-letter and receive the bonus Chart of the Day alerts. |
Originally published January 23 , 2008.
More Articles form Taipan Publishing Group's Christian DeHaemer
Gold Pullback Will Hand You a Buying Opportunity
Since the U.S. dollar and gold sit on opposite ends of what I call the "Seesaw of Pain," a rate cut could send gold surging higher.
The New Contrarianism
Most of the world is zigging towards gold and out of industrial base metals, but now is may be a good time to zag away from gold and into industrial and base metals.
Records Were Made to Be Broken
Gold prices may more than double and reach its inflation high of $2,120
Useful Links about The Future of Gold Prices
The Future of Gold
Gold prices around the world are having a slightly bumpy but steady road to higher values.
Gold Future
If one judges by the current activity of gold over this past year or so, it looks like the value of gold is going to just continue to rise.
As Alternative Investment, Gold's Future Looks Bright
Gold still has a bright outlook, analysts say: "We believe this is not just a fly-by-night rally,"
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