Richard Russell - Gold To Catch Fire and the Public Will Notice
With gold and silver on the move, the Godfather of newsletter writers Richard Russell had this to say in his latest commentary, “There is only one certainty regarding paper money -- the longer you hold it, the less it will buy in terms of real goods or real money -- gold. But there's a big difference between the current precious metals bull market and the bull market of the 1970s. The 1970 bull market drew tremendous interest (I was there). Everybody I knew (even the gold haters) were watching that bull market with keen interest, particularly during the wild "blow off" days of the late 1970s, when silver was rocketing higher -- rising every day by limit up.”
“In comparison, today's huge precious
metal bull market is greeted with yawns, that is, if it is greeted at
all. I've been calling the current gold/silver market the "great
stealth bull market." Ask the average man or woman on the street what's
happening to precious metals, and they'll give you a blank stare and
maybe a "Duh." Ask them if they own any gold or silver, and they'll
give you a sheepish "Nah."
Gold (April) closed on March 2 at 1437.40,
a record high. On March 9 silver closed at 36.04, highest since 1981.
Yesterday both marks were bettered. Where's the excitement, where's the
interest, where are the articles in the newspapers?
Time to study the chart (above). As I've
been saying, gold in its advance has periodically tested its 150-day
moving average over the past few years (150-day MA is shown as the blue
line on the chart). Note that on the most recent "correction," gold
didn't even test its 150-day MA. When I saw this, I realized how
powerful the forces under gold were.
Gold is now "out in the open" with no
overhead resistance and no overhead supply. So far the bull market
advance since 1999 has been steady, quiet, and orderly. Except for its
spectacular slow and relentless climb, there's been no excitement in
the gold bull market.
I don't think this is going to continue.
Some where ahead the precious metals bull market is going to turn wild
and speculative. Only one phenomenon will serve to create this
excitement. That phenomenon is HIGHER PRICES. The public can resist
anything in markets except steadily rising prices.
As for steady higher prices and
excitement, I suspect that silver is about there. As for gold, maybe
not yet. But somewhere ahead gold is going to catch fire. That will be
the time when the great American public will decide that they have to
have some gold, maybe just a coin or two, or maybe just a few shares of
GLD -- but that time is coming.”
Russell is correct, a mania lies somewhere ahead and the public will be
heavily engaged in the gold and silver markets. The question is
will this gold and silver bull market dwarf the one from the
70’s? Time will tell, but for now just sit back and enjoy the