Gold is about to take out $1,600...We may never see that $1,600 level ever again. - Jim Sinclair on King World News - Jim Sinclair, King World News interview LINKI highly recommend reading all of Jim Sinclair's recent interview postings on King World News, as he does a great job explaining the significance of the Cyprus crisis, what it means for gold and why the mainstream media is completely missing the mark in reporting the situation.
The way I see the Cyprus situation, it is the trigger we've been waiting for to ignite the next big, long-term move in gold:
Based on the current QE program, the Fed's monetary base projects out to be at $4 trillion by 2014 - a 31% increase from where it is today. If we assume that gold does a "mean reversion" in its correlation with the Fed's monetary base - a high probability assumption given the high correlation observed since 2008 - a 31% increase in the price of gold as of today - $1610 - would imply that gold has a high probability of going to $2100 by the end of 2013. In fact, I will make that my price prediction for gold for 2013.You can read my entire commentary on this - and the indicators I'm using as my "sign-posts" here: LINK
Those who have known me for awhile know that - because of the massive Central Bank/Government intervention in the gold markets (and all the markets) - I do not usually put out specific price and time-frame targets for gold. But I remember the last time Jim Sinclair put out a specific price target - $1650 - he was low by $250. Since he's forecasting $1900 on this move, I feel pretty good with my $2100 by year-end target, especially since my target is based on observable statistics.
Quite frankly, if my target is wrong by proving to be too low, then it means my worst fears about what is really going on behind the scenes in the global financial system - especially as it applies to this country - are correct.
The fact that U.S. Mint silver eagle sales midway thru March are already at 33% of 2012's full year totals - LINK - tells me that a lot more people in this country are starting to understand the same things I can see going on. It also means that the price of silver (and gold) can not possibly stay down this low relative to the fundamentals for much longer.