Almost no one thought gold and silver could ever get hit as hard as they’ve been. Not even the likes of big gold investors like George Soros … John Paulson … Rick Rule … Jimmy Rogers, and many others.

The thing is, they don’t really understand the gold market. They thought they did, but they failed miserably.

• They failed to understand that the gold and silver markets are like any other market. What goes up for 11 years straight has a very high probability of pulling back for two to three years. That’s simple technical analysis, and those high-flying money managers didn’t even get that right. Ed Note: while I posted this for some of the points that Edelson makes,  I certainly don’t think Edelson is right in his opinion of Rogers, Soros etc. Certainly I know that Rogers himself made the same argument Edelson does above, further that it wasn’t until Gold hit a 50% correction ($1000) that he, Rogers, was going to back up the truck to buy. – Robert Zurrer Money Talks Editor) 
• They also failed to understand that central bank money-printing is not always bullish for precious metals.

There are times where no amount of money-printing can inflate gold and silver prices because, very simple again, either investors are too scared to do anything with their money … or they see better opportunities elsewhere, like in stocks.

I could go on and on about how the bigwigs missed most or all of the correction in gold and silver and how many billions they and others lost.

But there’s no need for that. But for a short period last year, I got it right, and I helped my readers and subscribers avoid steep losses, and helped them make pretty big profits to boot.

So instead, I want to now turn your attention to what the next bull market will look like for gold and silver — to the forces that will drive metals higher again — once gold and silver finally do bottom.

The bottom isn’t here yet. But by preparing you for the future and for what will drive precious metals higher again once the bottom does come — you will be light years ahead of other investors.

First, and perhaps most importantly, central bank money-printing will NOT be the major force driving precious metals prices higher in the future.

So let me be perfectly clear, if you’re counting solely or largely on central bank money-printing to drive gold and silver prices through the roof in the next leg up, then you’ll miss the real reasons the metals will go higher.

Money-printing, this time largely in Japan and Europe, will be a force, but it will not be nearly as strong a force as it was in the metals first leg up from 2000 to 2011.

The reason is simple: Between the towering inferno of as much as $158 trillion of global debt with weak underpinnings and derivatives bets that now approach more than $1.2 QUADRILLION in notional value …

There is simply no way central banks could ever print enough money to stabilize the global monetary system. 

So print or not, the next leg up in the precious metals will not be  driven by money-printing. It will be driven largely by a breakdown in the global monetary system.

A breakdown in the global monetary system means there will be big banks and financial institutions going belly up … sovereign nations, especially in Europe going bust … Washington going bust … and sovereign bond markets collapsing to 10 cents on the dollar.

Money-printing will not solve or prevent or even delay those things from happening in the next several years. Period.

Gold and silver, once they do bottom, will start rising again because savvy investors are finally beginning to realize that their Emperors really do have no clothes, and all the money-printing in the world won’t be able to cover that up.

Second, inflation will NOT be a major force either. Don’t get me wrong. We do face higher inflation in the years ahead. But that part of gold and silver’s next leg up is still a ways off and won’t arrive until late 2015 or early 2016.

And even then it won’t be a big factor: Reason, despite what most pundits say, the U.S. will never face hyperinflation.

The reasons are simple: First, despite all the flaws in the U.S. dollar, it’s still the world’s reserve currency. And when the rest of the world, again, mainly Japan and Europe, are having so much trouble, it means the dollar will be a magnet for capital, keeping it from plunging into an abyss, thereby avoiding hyperinflation.

Second, is the size of our debt markets. They too are, like the dollar, an exorbitant privilege we have over the rest of the world. Come any signs of major inflation, the bond vigilantes will send rates higher, killing much higher inflation rates in their tracks.

Bottom line: Do not count on inflation to drive gold and silver prices higher going forward. If you do, you will be completely befuddled when gold and silver prices rise, yet there’s no sign of inflation on the immediate horizon.

Third, are the war cycles I’ve been warning you about. In previous articles, I’ve told you how the impact of the war cycles is already beginning to show in many different geo-political realms.

In Syria, in North Korea, in the Cyprus confiscation of depositor assets, in Russia’s moves in Ukraine, in China and Japan’s war of words over the Senkaku islands, in China’s moves in the South China Sea and more.

This is going to ultimately be the most important force driving precious metals higher. It will coincide with the first force above, the collapse of the world’s monetary system.

It will be a nasty set of conditions where governments are at war militarily or financially with each other …

And where governments are at war with their own citizens — repressing more and more liberties and personal freedoms, chasing down assets to tax and confiscate, and more.

In other words, total upheaval of modern society, coupled with a collapse of the global monetary system.

In a nutshell, those are the real reasons gold and silver prices will soar in their next leg up. Not inflation alone. Not money-printing alone. Not even currency devaluations alone. 

Get it right, and you will be buying gold and silver near their lows in 2015, when just about everyone else is throwing in the towel.

Right now, I still expect to see gold below $1,000 early next year. Then the bottom will be in.

Silver could fall to as low as $12.50, worst case.

After that, the lid will come off, and the precious metals will begin their inevitable march higher, to $5,000 gold and at least $125 for silver.

For now, remain hedged up or outright bearish per my suggestions in these columns to use inverse ETFs. They are serving you well, with nice open gains.

And stay tuned!

Best wishes and Happy Thanksgiving,

Larry

– See more at: http://www.swingtradingdaily.com

With historic events taking place around the globe, the Godfather of newsletter writers, 90-year old Richard Russell, put out one of his most dire warnings of the year, covering everything from missing U.S. gold, to the complete collapse and destruction of all global fiat currencies and the world monetary system.  The 60-year market veteran also warned that if the U.S. gold is in fact gone, it will be the “monetary story of the century.”

Russell:  “I’m looking at a report from the World Gold Council, September 2014. I was shocked to see that according to the official world gold holdings, the US holds the largest amount of gold of any nation in the world. Even more astounding, the US leads the world in the percentage of its currency reserves in gold. According to the World Gold Council, the US holds 72% of its forex reserves in gold.

How can this be?

….read on to find out RR’s answer to that question HERE

Gold has been volatile in recent weeks. It broke down, then it bounced back up. So where does it currently stand? 

Gold’s timing will help us in identifying the lows and the steps upward towards a new bull market. 

Chart 1 shows our favorite gold timing tool. As our older readers know, gold has had recurring cycles going back for years.

(Click on image to enlarge)

Currently, a D decline has been underway since last March when gold’s 2014 rise petered out. D declines tend to be the worst decline in gold’s cycle. And during bear markets, D declines usually take gold to new lows for the bear market.

This is exactly what happened this month. Most impressive, the leading indicator has yet to fall into the extreme low areas that normally coincide with D lows… This means gold could still go lower before this decline is over.

On the downside, gold will remain weak below $1200, and especially below its $1180 low. And the longer this is the case, the more likely we’ll see lower lows soon.

A clear decline below $1150 means $1100 would be a shot away. This would likely take the indicator down to test the extreme D lows.

GOLD SHARES: Fell the most

Gold shares, however, took the cake. They plunged much more than gold and silver. And the gold share indexes fell to their 2008 lows. That is, they fell to the lows of the depths of the financial crisis washout.

The HUI Gold Bugs index is now starting to consolidate near these lows above 150, and as long as that’s the case, we just may see the start of constructive base-building.

Gold mining shares are weaker than gold, the most they’ve ever been since the 1960s. This weakness is not over yet, but the 5 week moving average works well in identifying the start of a turn.

So keep an eye on 170 for HUI. If it can stay above this level, gold shares will be looking better and they could then be leading gold.

###

Nov 20, 2014
Mary Anne & Pamela Aden
email: info@adenforecast.com 
The Aden Forecast

As a follower and participant in the gold bull market from 2002 until now I can say unequivocally that the two most bearish periods sentiment-wise in the bull market so far are the fall of 2008, and right now.  Therefore, by definition, the two most profitable times to buy gold stocks were in the fall of 2008, and right now.  This simple concept is incredibly difficult for most people to understand and put into action.

The media will always lead you astray when it comes to these phenomenal buying opportunities.  In early-2009 it was an incredible time to pick up just about any asset you could think of: real estate, stocks, commodities, etc.  But the overwhelming mood on TV and the Internet back then was bearishness at that epic buying opportunity.  My second favorite glaringly wrong example from the media was the end of 2012 when the media was petrified of the fiscal cliff.  For a month straight in December 2012 that’s all you heard on CNBC, how the fiscal cliff was going to be terrible for stocks in 2013.  But it turns out 2013 was an awesome year for stocks, and the bears in the media were 100% wrong.

What do early 2009 and late 2012 have in common?  Both were the ends of periods that were bad for the markets.  In 2009 of course it was the end of the epic stock market meltdown, and in 2012 it was a two year period from 2011-2012 where stocks didn’t make a lot of head way.  Instead of being bullish at the bottom though the media extrapolated these negative periods out into the future and predicted more bearishness to come.  The media is always focused on the short term and in sensationalizing whatever is happening right now.  This puts way too much emphasis on the current state of the market and forgets the cyclical nature of the market over the long term.  So at the turning point in long term cycles they are always going to be 100% wrong and look foolish.

You can’t listen to the average money manager these days either because like the media they are controlled by the tyranny of the present.  They are slaves to quarterly performance, beating benchmarks, and siphoning profits from their customers who will go away if they lose money in the markets.  Therefore they can’t be involved in getting in too early in a bear market and sustaining losses over a long period of time.  That will ruin their business prospects for the future and they will avoid that whenever possible.

I personally believe what we saw at the end of October was the capitulation of professional money managers who had assets in gold and gold stocks.  They finally threw in the towel at a key tax loss selling time of the year and decided to get out of gold and gold stocks.  The evidence for this is the surge in volume across gold and gold stocks and massive losses over a short period of time.  That usually only happens when the big money gets out all at once.  But they are human like everyone else.  And combined with the fact that their actions are way more affected by short term performance, it’s not surprising that we see massive liquidations of positions at the bottom of a trend, even by the “pros”.

Let’s talk about the life changing opportunity that those that are tied to the present are completely oblivious.  Gold stocks are now at the tail end of a 4-year bear market if you go by the XAU gold stock mining index.  Four year bear markets are typically brutal in gold stocks and this is one of the most brutal yet.  But we know from the chart below that due to the cyclical nature of markets in general and of the gold market in particular, that what we should expect next is a bull market.  And if its a bull market in gold stocks it should offer big gains.

Larger View

Even during the secular bear market in gold from 1980-2000, the gold market went through cyclical bull markets that offered big gains for gold stocks.  The 1993-1996 bull market is shown above and offered more than a 100% gain even though the secular trend for gold at that time was down.

Now starting in 2001 gold had shifted into a secular bull market which caused the bull market in gold stocks that launched in 2001 to be spectacular.  This bull leg offered more than a 5-bagger for the XAU and even bigger gains for individual gold stocks.  Then we got the 2008 meltdown, which produced the next epic buy point for gold stocks and a 3-bagger bull market.  It was incredibly painful to buy at the depths of that 2008 bear market.  But not only was there a 3-fold gain in the XAU, some of the individual returns on specific mining stocks during that period dwarfed anything else in the entire stock market.  Silver Wheaton and First Majestic Silver are two stocks that come to mine that had 20-baggers from their 2008 lows.

I personally didn’t believe we would get another opportunity like 2008 in this gold bull market but here it is, staring us right in the face.  And I think the prospects for this next bull run are truly mind boggling if you think about all the money that is going to come flooding back into this sector when the secular bull resumes.

Connect with me on Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.