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AG Thorson

Last year the U.S. Mint produced the least amount of gold eagle coins in the programs 33-year history. Demand for precious metals has cratered, dropping some 85% since 2016. Our work supports a major shift in 2020 as financial fears wake investors from their complacent, pleasant slumber.

Thinking for Yourself

Unfortunately, the average investor rarely gets it right. They follow the herd, and like lemmings, plunge themselves over the cliff. They watch the news and do what everyone else is doing; that makes them feel comfortable. Only a precious few dare to think for themselves.

If you’re reading this, then perhaps you’re one of them.

Be Contrarian 

As an investor, I’ve made a living doing the opposite of what everyone else is doing. When everyone was talking about bitcoin in late 2017, I said it’s a bubble and about to burst. Prices peaked a week or two later and crashed to my $6000 target.

Contrarily, physical demand for precious metals was at rock bottom in 2019, even as gold broke above $1400 and confirmed a new bull market. Most investors were either unaware or asleep…that is changing as we speak. Fears over the coronavirus and a plunging stock market have awoken the sleeping giant – his name is “fear.” And with “fear” returning from hibernation, things are about change for precious metals.

I see a lot of anxiety in the precious metal community. With the crashing stock market and lower dollar, gold should be well-above our March $1700 target – it’s not. Silver also continues to lag, failing to make new highs before crashing to multi-week lows.

The 2020 Reflation Trade

Now, the good news. I think the 2003 SARS outbreak could shed some light on what to expect next. The SARS outbreak of 2003 peaked with the flu and began to decline with warmer weather. It’s too soon to know, but I expect the same fate for the coronavirus. The news tends to overplay the real threat level. As China goes back to work, the pent-up demand will slingshot an immediate need for materials and commodities leading to a second-half reflation. See the 2003 silver chart below for an example of what I think could happen.

Here is the silver chart from 2003 (highlighted section).

  • Silver fails to exceed prior years high
  • Price declines into the end of Q1
  • Prices consolidate into June before embarking on an 80%+ 10-month rally.

I see a similar outcome for silver in 2020 to early 2021. If I’m correct, then by this time next year, silver should be testing $26.00 – $28.00.

Currently, our Gold Cycle Indicator is at 412, and we are anticipating a top in gold any day.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit https://goldpredict.com/

 

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