June 1, 2004
Author: Jim Sinclair

My firm belief is that the price of gold is only starting its price appreciation despite the claptrap coming from all the purely technical analysts who have no fundamental understanding of gold and what drives it. Right now the fundamentals are in place for gold to deliver $480 plus.  

Afghanistan cut the jugular vein of the former Soviet Union so what makes you think that Iraq and Afghanistan are not going to mortally injure Western capitalism?
Will Iraq become a democracy with its newly-appointed government or can you democratize a country that is devoid of democrats? With recent poles showing strong support for the fanatical martial cleric al-Sadr, can elections be expected to institute a democracy?

If Saudi Arabia does in fact flood the market with oil, will that action signal the end of the Saudi Royal Family in a blood bath? Is Western capitalism changing its traditional form both of government and of balance sheet health?

Is Western capitalism on the same road to nowhere that the Soviet Union took when it invaded Afghanistan with the purpose of imposing Soviet autocracy on that traditionally ungovernable country?

Have you checked the definition of the word "Sovereignty?"

The American Webster dictionary defines this word "sov·er·eign·ty"  as follows:  "n. pl. sov·er·eign·ties - Supremacy of authority or rule as exercised by a sovereign or sovereign state. Royal rank, authority, or power. Complete independence and self-government. A territory existing as an independent state."

If this is not what is turned over to the appointed members of the new Iraqi government, will it not be embarrassing to those who state it has occurred? Does the management of Iraq really believe that Americans are so stupid that they do not know what words mean?. Well, maybe.

The answers to all of the above questions are the fundamental factors that will impact the dollar which in turn will impact gold. This is what the nit wit technicians should have known when they issued their bearish forecasts about gold and their even dumber bullish dollar pronouncements.

Shame on every gold advisor who pushed you into a loss for no reason whatsoever. Shame on you for following them. Greater shame on you for sending them your money.

Shame on the web sites that post every opinion so as to lead you into the type of confusion that sets the stage for the gold geezers to issue their bearish technical calls in the face of fundamentals that are going to give you gold over $500 in the near future.

I pose the final question: Why in the world sell gold this morning at $399.80 when it is going to or above $480 by August 15th. If you were fooled once by the nit wits, are you going to be fooled twice?

Who with credentials was out there yelling, "stop the madness" to you when gold was being hammered and the professional interests were covering as fast as they could?

Gold at only $400 is madness in light of the fundamental condition now present and forming in the market.

Remember that oil impacts the dollar and the dollar impacts gold.

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