When?

In forecasting what will happen to the Precious Metal (PM) prices, we are interested in the answer to two questions: 1. How much and 2. When?

Martin Armstrong and Alf Fields estimate the top of the gold bull market to push gold prices to between 10,000 and 12,500 USD/oz. So the we are left with the question of when.

Jim Sinclair and Dan Norcini told KWN that the key figure to watch is $1764/oz gold. When the market closes above that figure, confidence in the US Dollar will be lost and gold will go hyperbolic, jumping $100 to $200 daily. So then, how far are we from the $1764 figure?

In order to try to answer this question, I decided to look at the graph of the weekly gold price. So far, gold prices have increased on a predictable schedule. A mini rally lasts 4-5 months, followed by a slight correction and then the rally resumes. Weekly gold prices run above the 50 DMA and the 50 DMA is diverging from the 200 DMA, so that the two lines are coming further apart. Assuming that gold prices continue moving at this same rate, the weekly average would exceed $1760/oz between November of '11 and April of '12.

There is the question of fundamentals to consider, however. Financial conditions have deteriorated in Europe and the United States and this may shorten the time to 1764. Europe may have to print some serious cash to rescue Italy and Spain and the O'Bungle regime is busy trying to engineer a US default. This might shorten the time to the financial denouement. There are two technical indications that this might happen: 1. the MACD of the graph is continually rising, indicating that the momentum of the gold price is getting stronger and 2. the breakout from the last correction is much stronger than in previous mini rallies.

Uncommon Wisdom estimates using the Cycle Theory that the big rally will begin in the Fall.