“Gold is on the verge of another failure, dangerously close to another leg Down not UP” – Larry Edelson

Unlimited money-printing from the Federal Reserve. Unlimited euro-printing from the European Central Bank. Unlimited yen-printing from the Bank of Japan …

North Korea about to stage a rocket test directed at striking the U.S. North Korea now threatening war with South Korea. Terrorist actions in Algiers. In Mali.

Bankrupt Spain. Greece. Italy. France going down the tubes. Britain on the edge of its third recession since 2008, with its fourth-quarter 2012 GDP contracting more than expected.

Unemployment in Spain’s 16-to-24 age group just hit 55% and overall unemployment, 26.6%, the worst in Spain’s history.

Washington in debt past its eyeballs, and desperate. So much so, it’s acting as though the debt doesn’t exist at all — once again kicking the issue down the road, this time to May 18. And more.

And gold is now nearly $257 below its all-time record high. It can barely rally.

Every time it does, the rally fades away and now, the price of gold is dangerously near an important weekly sell signal on my systems, which stands at $1,657.

I would love nothing more than to tell you that gold has finally embarked on its next leg up to $5,000-plus.

But the fact of the matter is that there is no evidence that it has. Period.

In fact, gold is telling you exactly the opposite: That there isn’t even record demand for gold right now. That instead, demand is actually slumping.

That more debts are about to be liquidated than the central banks can offset with money-printing.

And that inflation has not yet broken out to the upside.

That’s why I’m sticking to what my models say: The next phase of gold’s bull market (and all commodities for that matter) — is not yet here.

Which is precisely why I’m still not ready to stick my head out and load up on more gold. Nor should you.

My forecast — despite all the hate mail and pressure I get to change it — has also not changed: Based on my systems and models, I will not turn bullish again on gold until either …

A. Spot gold has closed above $1,823 an ounce on a weekly and monthly basis. Or …

B. Gold cracks the $1,527 level and plunges to the $1,400 level, and even a tad lower.

I know that’s not what you want to hear. I know that you are as eager as I am to see the next leg of gold’s bull market begin.

I know that you want to buy more gold, load up on it and ride it to glory over the next few years. So do I.

But when a market as sensitive as gold is to geopolitical events … as sensitive as gold is to money-printing and bankrupt governments … doesn’t do what logic says it should be doing, then something else must be going on. Markets are never wrong.

So what is gold really telling us? With all the money-printing going on, why hasn’t gold broken out yet?

With busted governments in Europe, why isn’t gold rallying?

With new war threats coming in from North Korea and from terrorists, why isn’t gold flying to the upside?

Why, in the face of all that, is gold instead dangerously close to issuing another weekly sell signal on my systems, and threatening to plunge anew?

To those of you looking for a fundamental explanation, the reasons are simple:

I see two major forces at work right now that are overpowering all the others …

First, money-printing — even when virtually all major central banks are doing it — means nothing when most of the money being printed is merely ending up sitting in the banks. I’ve said that before and it’s still largely the case.

It means consumers aren’t interested in adding to debt by increasing their borrowings and credit lines … and the velocity of money, or its turnover, is virtually non-existent.

Ditto for corporations that are conserving cash and largely paying down or refinancing debt rather than taking on new debt. Or choosing to buy back their own shares.

Second, fears of North Korea’s recent threats or renewed terrorist uprisings are — at this time — also actually suppressing gold. It’s causing just enough geopolitical uncertainty to put savvy investors in a “cash mode” of thinking … and not quite enough uncertainty to drive them directly into gold.

Both of the above forces will — down the road — become bullish forces for gold. But as those who recently attended the Weiss Wealth Summit in Florida already know from my presentation at the event, none of the above forces will become bullish until it’s time for them to do so.

And based on my work, that’s not likely until later this year. And from much lower prices in gold.

I know that’s difficult to understand. But do listen to the markets and what they are telling you. The markets, I repeat, are never wrong. Only the interpretations and expectations are.

So stay the course. Build up your stash of cash ammo so that when it does come time to pull the trigger on gold again and back up the truck, you will be able to.

Ditto for silver and other natural-resource and tangible-asset investments. While their time to shine is not here yet, it will come again, I assure you that.

You want to be fully ready and able to capitalize on these forces. If you listen to the pundits who proclaim the next bull market is here every time gold rallies $5 or $10 … or even $25, you won’t be ready. You’ll be far more likely to suffer massive losses. Ditto for silver.

Stay the course, build up your ammo, and be ready to pull the trigger when I issue a headline like “Back Up the Truck, NOW!”

Best wishes,

Larry

The advent of computers and the internet have brought much change to the industry. Brokers are no longer required to trade stock; anyone can trade stock for less than $10 a trade. Algo-machines now represent probably well over 30% of daily volume on any exchange in a given day. These trading software platforms place and make trades in nanoseconds and often hold stocks for no more than 16 seconds. Just ask the guys at Tradebot. 

When I wrote last year that the S&P would hit 1500, most experts thought I was nuts. The fundamentals weren’t there to justify it, and to some degree they were right. But the market has changed. So much in fact that technicals, and a lot of what experts have studied throughout their careers, are no longer relevant – at least not entirely. 

Those who used to study technical charting patterns have never studied the effects of these machines. It’s a different world now. 

On the Canadian front, the big institutions are also benefitting from the little guys. They make trades for little cost and even get a kick back from the exchange based on the amount of trades they make. When everyone is scraping for pennies, you can bet the big guys are taking advantage of every retail trader they can by short selling and manipulating the markets any which way that benefits them. This isn’t hard to do given the liquidity issues in the Canadian market which makes it really difficult for companies to thrive. 

Congress has pushed the debt ceiling deadline out to mid-May to give both sides more time to pound out a budget agreement, so there are strong reasons to expect a favorable seasonal rally to continue.

There still remains a tremendous amount of cash on the sidelines earning next to nothing in savings accounts and bond funds to fuel a further rally. And as I mentioned in my letter, “Time to Sell the World,” there is evidence that previously bearish investors who took money out of the stock market after 2008 are pouring back in. I also said that once the S&P pops passed 1500, we should all be much more careful as, “we have more downside than up at these levels.“

The key to investing is to buy low and sell high; not buy high and sell higher. It may not necessarily happen this month, but I feel we’re closing in on a near-term top. I started this letter saying this is the best January for the Dow Industrials since 1994. What I didn’t tell you is that the best January in 1994 for the Dow Industrials was followed by a nasty decline of 10% the month after. 

I know investors remain bullish and sentiment has been pushed higher, but it’s time to start peddling back a little and let your money breathe. Even if just a little.

The market has been up 11 of the last 12 days…