via Gold-Eagle

"The data contained in the appendix continues to paint a picture of an important low in the precious metals complex. The data speaks to the rock bottom valuation of mining shares, dispirited sentiment, and compelling macroeconomic fundaments supportive of the gold price. It portrays a landscape of opportunity for the contrarian minded investor. The past ten months, and especially the most recent six months have been an incredibly difficult test of investor fortitude and steadfastness. It is in the nature of all bull markets, and (perversely) especially so for precious metals, to shake out as many as possible along the way to minimize participation to the fewest possible stalwarts. Turns from such a lengthy and important bottom are not designed for instant gratification. Their length is designed to produce maximum demoralization as investors ruminate on the paradox of stellar fundamentals that go unrewarded by market action."

http://www.gold-eagle.com/editorials_12/hathaway070512.pdf

The following chart is the best indicator that gold prices must rise initially, after a treasury bond sell-off. Gold and gold mining shares rallied along with the treasury bond rout.

What should occur is that many asset classes such as equities and commodities should decline concomittantly along with treasuries, while gold prices appreciate. This will absolutely have to occur at some point if gold is money, or you can just throw the stuff in with other commodities. I think for the first time that people will finally get it.

What this chart says in the meantime that negative real interest rates will moderate for a time, until they are zero, and then reverse once again with a new downtrend. In the meantime, gold prices will have broken out. Equities might gain as well, but eventually continue down their bear market trend along with say, copper and oil.

source: http://www.NowAndFutures.com/forecast.html#predict_gold

-F6