No Way Gold Has Bottomed!

Posted by Larry Edelson - Commodities, Stocks, Technical Analysis

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Screen Shot 2015-02-18 at 6.48.28 AM

A lot of investors want to know why I am not screaming from the rooftops, “Buy Gold!”

The reason is simple: Gold has not bottomed yet, not by a long shot.

So why am I so confident gold has not bottomed (ditto for silver), especially when all is not well with the world?

After all, in addition to the Ukraine crisis, which is not over, tensions are rising dramatically all over the world.

My answer is simple: It’s not yet time for gold and silver to take off to the upside. Quite the contrary, they have more work to do on the downside.

Look, every market has its time and place in the sun. And every market has its false rallies. That’s why timing is so critically important.

The pause in gold and silver’s long-term
bull markets is not yet over

In contrast to important tops in any market, important bottoms take time to complete. That’s especially true with the precious metals.

Gold and silver have more backing and filling to do. They have lots of investors they still need to chew up and spit out. Especially the most recent buyers and pundits urging investors to buy.

Screen Shot 2015-02-18 at 6.48.28 AMIn fact, gold and silver will not bottom until most investors have turned outright bearish on them.

That’s one of the reasons why gold and silver took a nice nose-dive last week. It cast out recent buyers. And though there may be one or two more bounces higher — sucking in even more naïve analysts and investors …

Gold is destined to fall below $1,000 … and silver to near $12.50 in the months ahead.

Mining shares, even penny miners, will be sliced in half again.

Keep in mind that for a market to bottom, it must hit long-term support levels at the right time. When price and time converge together, then you have an important bottom.

We have none of that yet, in gold, silver, any precious metal, or the mining sector. And though yes, one or two more bounces higher can easily form, the most important thing for you to know right now is that a new sell signal is rapidly approaching.

You can see it here on this chart that I have for you.

A chart based on a composite of all the reliable cycles affecting gold’s trading. Over two billion computations of those cycles and what they say for the future of gold.

Click image for larger view

As you can clearly see, though one or two more small rallies remain possible, this model is showing a very strong timing sell signal for Feb. 26, just eight days from now.

And take a look at the decline it’s forecasting. It’s quite a whopper. A potential waterfall decline that would last into late May, where gold would have a chance to finally bottom, around the week of May 21.

Then there would be a bounce, and a sort of double-bottom formation heading into late June, before gold’s new bull market actually materializes.

The long-term bull market would then take back over.

But the bottom line is this: The bear market in the precious metals is not yet over, and anyone telling you that it is, either has a hidden agenda, or simply can’t see the writing on the wall (or both).

Ditto for mining shares, no matter how big or small they may be, no matter how cheap they may seem.

So what will drive gold into its final bottom?

It’s simple and it boils down to two chief reasons:

1. As I mentioned above, there are too many premature bulls in the market. They’re still trying to buy and get everyone else to buy, and that in itself is a sign gold has not bottomed.

Gold will bottom when the investors and analysts screaming “buy now” are bloodied.

2. Deflation is reigning supreme now. It’s almost everywhere. Blanketing Europe. Even some sectors in China and Asia. Even here in the U.S. And in virtually all commodity markets.

All this, despite the most massive money printing in the history of civilization!

So much for all that hyperinflation talk!

Best wishes,


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