Elevated readings of the ‘Gold to Miners ratio’ have a credible 
tendency to mark important bottoms. Readings, especially this past 
week, certainly justify the current climate as not only bottom 
worthy, but very stretched-- while holding safely 
above the “July lows”. 

There is an implication here! 
And that is, that the most recent three day wipe out is unlikely 
to go much further because everyone who would’ve sold out, has 
already done so! 
This ground halting reversal will be in keeping of a larger 
framework of the current Bull market’s livelihood, and that is, 
maintaining an orderly (trend shaping) sequence 
of higher highs and higher lows. 

Ing Sets $10,000 Target for Gold - 

While $10,000 may seem outrageous, gold rose nearly 2,500% from 1971 
to 1980 but is only up 550% from the lows of 12 years ago, 
says analyst John Ing. 

What follows is excerpt from John Ing’s January gold report.


Ing is a gold analyst and President of Maison Placements Canada in Toronto. 

Gold was up last year for the 12th consecutive year, the longest in 
at least nine decades. Gold rose 7% last year, spurred by ETFs as 
well as central bank buying. 

Gold has rallied from $250 an ounce, moving almost eight times to a 
high at $1,920 in 2011, but still shy of the inflation adjusted 
price of $2,500 an ounce. 

However, gold lately has not been as precious, frustrating both 
bulls and bears despite fears about the US economy, political 
gridlock and more quantitative easing. 
In the past, these influences would act as a 
catalyst for stronger prices. 

Central banks are the largest official holders of gold with some 
31,000 tonnes of gold in their vaults. 
In fact, they have been big buyers with more than fifteen banks on 
the buy side in an effort to diversify their reserves in response 
to growing concerns about a weaker US greenback. 

Under Basel 111, gold was rerated from a Tier 3 asset to Tier 1, 
allowing banks to buy or hold gold instead of sovereign bonds. 

Central bankers will continue to be big buyers of gold. 
However, ETFs or the people’s central bank established in 2003 
bought some 2,632 tonnes, holding slightly less than 
the IMF with 2,814 tonnes. 

Although nearly 40% of the world’s supply is recycled, the only 
source of new supplies are the gold miners, which lost nearly 25% 
[of stock market value] since late 2011. 
Miners’ cash costs are a concern as mega-billion projects 
bring mega problems. 

But the industry has got religion. 
Most will emphasize profits over growth. 
Dividend hikes are likely and M&A actually will see the cast-offs 
of higher cost mines. 

Growth has given way to profits. 
Moreover, we expect emerging signs of a shortage of physical gold 
as gold miners’ production peaked. 
To supply this demand, the gold miners produced 
only 2,700 tonnes of gold annually. 

The only other source of gold is the estimated 22,000 tonnes in-situ 
reserves held by the gold miners in the ground, but that must be 
extracted at a cost of $1,000 an ounce. 

We believe the in situ-reserves will be more highly valued, causing 
a reversal of the equity downtrend. 

The bull market for gold shares has just begun. 

Gold stocks have never been so cheap 

Chinese gold demand fell in the third quarter due in part to the 
lull before the leadership change. 

We expect a resumption in demand that will see China consume more 
gold than any other nation, beginning in the current quarter. 

China alone has 1,084 tonnes, however that represents 
less that 2% of its reserves. 

If China were to increase its holdings to 10%, that could represent 
at least three years of the world’s output. 

Still, China is the fifth largest holder behind the United States. 

It remains the largest holder with 8,133 tonnes held at Fort Knox. 
It doesn’t matter then, who owns the gold, whether a central bank, 
ETF or my wife. 
Gold has the same value whoever owns it. 
Gold has been range bound. 
In the short term, gold needs to break through $1,700 an ounce. 

Gold is a hedge against the consequences that the world’s central 
banks will eventually ignite inflation. 

This fear also explains why the idea of a return to a gold standard 
has appeal, particularly when every major currency has fallen 
against gold. 

Gold has simply become the world’s new global currency. 

Gold is a hedge against debasement of currencies as well as an asset 
of last resort among central banks and investors. 

As such, we have raised our new target to $10,000 an ounce. 

While $10,000 may seem outrageous, gold rose nearly 2,500% from 1971 
to 1980 but is only up 550% from the lows of 12 years ago. 

Maison’s John Ing continues to lead First Coverage rankings - 

There is a lot left in this bull market. 

USGIF good Ag & Au News should be in the pipelines soon - 
God Bless