2016-06-24
BREXIT is the driver to move equity markets and gold prices higher, not lower. Uncertainty is the reason for equity markets to decline today and for gold prices to rally. But if you review my recent blogs you will see that I believe the price of gold is on the way to 1,900 and that equity prices would only briefly be held back from a strong Bull run to Dow 24,000. Had the REMAIN vote won, I believed that a bullish phase would have commenced immediately. Today the uncertainty will clearly knock prices down to a 4th test of Dow 17,300. Individuals who do not know how to trade will sell and the 10% or so who are skilled traders will buy into the weakness. Once the base is solidified above 17,000, the Dow is on its way to 24,000.
BREXIT may be over-turned or at the least stalled by counter-forces in the legal and political arena. I expect that process to begin to calm fears. However, the reality is that decision-making uncertainty will serve as another deflation/recession driver, which will cause all central banks to do precisely what I have been expecting. Basically worthless money printing and credit expansion will serve to stave a global economic collapse but mostly cause the prices of (most) equities and gold to soar.
Coming soon.
These are historic times. Remember, the market is a game that plays people, and there are seldom times like this where the powers that be are in full-out spinning mode. Don’t get played.
Have a great day.
/Bill
