'Suppression is BROKEN' - GOLD to 'At Least $10K', SILVER to $200+: Gary Savage

Key Concepts

• Precious Metals Bull Market: A sustained period of rising prices for gold and silver.
• Price Discovery: The process by which market prices are determined through the interaction of buyers and sellers, free from artificial suppression.
• Managed Corrections: Price pullbacks orchestrated by large market participants (e.g., bullion banks) to suppress prices.
• Secular Bull Market: A long-term bull market that can last for decades.
• Cyclical Bear Market: A shorter-term downturn within a secular bull market.
• Bubble Phase: The final, parabolic stage of a bull market characterized by rapid price increases and widespread public participation.
• Wall of Worry: A market phase where prices rise despite investor skepticism and fear, leading to sustained upward momentum.
• Cup and Handle Pattern: A bullish technical chart pattern indicating a potential upward price movement.
• Gold-Silver Ratio: The ratio of the price of gold to the price of silver, used as an indicator of market sentiment and relative value.
• Dow Gold Ratio: The ratio of the Dow Jones Industrial Average to the price of gold, used to assess the relative valuation of stocks versus gold.
• Fiat Currency: Government-issued currency not backed by a physical commodity like gold.
• Socialism: A political and economic theory advocating for social ownership and democratic control of the means of production.
• Appreciating Assets: Assets that are expected to increase in value over time.
• Depreciating Liabilities: Assets that are expected to decrease in value over time or represent a cost.

Precious Metals Market Analysis and Price Targets

Gary Savage, a precious metals analyst and president of the Smart Money Tracker investing newsletter, asserts that the market manipulation suppressing gold and silver prices has broken, leading to true price discovery. He projects significant price increases for both metals: gold to at least $10,000 per ounce and silver to over $200 per ounce in the current cycle.

Silver's Recent Price Action and Future Outlook

• Current Situation: Silver has recently experienced a correction after reaching new nominal all-time highs near $54 per ounce, pulling back to just under $50 before attempting another run. Savage believes the market is close to breaking the $54 resistance.
• Support Level: He is observing the $50 level as a potential retest of support.
• Price Target: Savage has a target of $100 for silver in 2026, potentially as early as late spring, with high odds of reaching this by the end of 2026.
• Breakdown of Suppression: Savage argues that the suppression of the silver market broke when prices could not be held below $33. He likens this to gold's inability to be driven below $2,000.
• Nature of Corrections: He views the recent pullback as a normal correction driven by temporary over-bullish sentiment and prices becoming stretched far above the 200-day and 200-week moving averages, rather than a deliberate attempt by bullion banks to suppress prices.

Gold's Price Action and Future Outlook

• Suppression Break: Similar to silver, gold's suppression is considered broken when it could not be driven below $2,000.
• Price Target: Savage anticipates gold reaching $5,500 or potentially $6,000.

Precious Metals Bull Market Cycle Analysis

Savage posits that the current precious metals bull market is in its "bubble phase," a mature stage of a 26-year cycle.

• Market Phases: He explains that commodity bull markets typically unfold in two phases. The first phase of gold's bull market ran from 1999/2001 to 2011. This was followed by a cyclical bear market, and then the second phase of the bull market began, which has been ongoing for over 10 years since its bottom in 2015.
• Public Awareness as a Bellwether: A key indicator for Savage is when the general public, previously unaware of precious metals, starts taking notice. He cites a personal anecdote of a friend with no investment knowledge calling him about gold exceeding $4,000 as a "bell ringing" that the public is becoming aware.
• The "Bubble Phase": Savage believes that once the public starts to pile in, there is typically a year to a year and a half remaining in the bull market. This phase is characterized by "mind-blowing moves" and a parabolic ascent.
• Technical Indicators:
  • Long-Term Chart: Savage points to a 14-15 year base (from 2011) in gold's price chart, suggesting a significant upward move is possible, following the "bigger the base, higher in space" rule. The recent vertical ascent indicates a change in the market's character, moving into a bubble phase.
  • "Wall of Worry" vs. "Manic Buying": He emphasizes that the longer the market stays in the "wall of worry" phase, characterized by intermediate corrections (sideways churns or ABC moves), the higher it will go. A rapid recovery without significant corrections signals the transition to the "manic buying" phase, which limits the market's ultimate potential.
  • ABC Corrections: Savage explains that an ABC correction involves an A-wave down, a B-wave bounce, and a C-wave that undercuts the previous low. This phase can shake out early buyers but presents a buying opportunity for those who understand it.
• Potential Scenarios:
  • Extended Bull Market: If the market continues with normal ABC corrections or sideways turns, the bull market will last longer, leading to higher ultimate prices (e.g., $10,000+ for gold, $200-$250+ for silver).
  • Early Bubble Phase: If the market recovers quickly without a significant "wall of worry" correction, it signals the early part of the bubble phase. While still leading to substantial gains, it might cap the ultimate upside compared to a longer, more drawn-out bull market.
  • Loss of "Wall of Worry": If the "wall of worry" phase is lost and the market transitions directly into manic buying, the potential upside will be limited.

Signs of a Bull Market Ending

Savage outlines several key indicators that signal the winding down of the precious metals bull market:

• Gold-Silver Ratio: A ratio between 20:1 and 30:1 suggests the metals are severely overvalued.
• Dow Gold Ratio: A ratio of 3:1 or 4:1 indicates that stocks are undervalued relative to gold, signaling a time to sell gold and buy stocks.
• Parabolic Move: The price action will become extremely parabolic, with silver potentially increasing by 100-300% within a year.
• Extreme Stretch Above Moving Averages: Prices will be significantly extended above the 200-day and especially the 200-week moving averages.
• Public Overconfidence: Inexperienced retail traders will become overly confident, driven by narratives and the desire to copy others.

Selling Strategy and Investment Alternatives

• Complete Position Sale: Savage advocates for selling one's entire gold and silver position when these indicators are met, arguing that holding through extended bear markets (like the 45 years it took for silver to break out after 1980) is detrimental.
• Investment in Stocks: When the Dow Gold Ratio signals an opportune time, Savage suggests buying stock market indexes like the QQQ or SPY, as they will likely be undervalued.

Critique of Gold-Backed Monetary System and Fiat Currency

Savage dismisses the idea of returning to a gold-backed monetary system, citing historical precedents and practical limitations.

• Historical Precedent: He notes that similar narratives about the dollar's collapse and the need for a gold standard were prevalent in 1980, but did not materialize.
• Political Incentives: Politicians are disinclined to relinquish the ability to print money.
• Money Supply Expansion: The money supply needs to expand proportionally with a country's productive capacity, especially with rapid technological advancements. A gold standard would hinder this necessary expansion.
• Gold as a Hedge: While gold is a good hedge against inflation during inflationary periods, these periods eventually end.
• Narrative at Tops: Savage believes the "this time is different" narrative, often used to justify buying gold, will be the same narrative used to encourage holding gold at its peak, leading to significant losses during the subsequent bear market.

Analysis of Socialism and Economic Systems

Savage offers a strong critique of socialism, arguing it is a failed ideology that destroys societal incentives and leads to widespread misery.

• Socialism as a Grift: He labels proponents of democratic socialism as "grifters" who understand that government officials benefit most under such systems, despite knowing its historical failures.
• Envy as a Driver: Savage identifies envy as a destructive emotion that grifter politicians exploit by promising to redistribute wealth from the rich to the poor.
• Disincentive to Innovate: Socialism removes the incentive for individuals to work hard, innovate, and take risks, as rewards are equalized regardless of effort.
• Capitalism's Flaws and Strengths: While acknowledging that capitalism has its share of corruption ("crony capitalism"), he argues it is a more robust system than socialism. He believes utopia is unattainable and that systems must be resilient enough to withstand corruption and theft.
• Welfare State Ineffectiveness: Savage points to the persistent poverty rate (15%) despite trillions spent on welfare programs, suggesting these programs trap people in poverty by removing the incentive to improve their lives.
• Minimum Wage vs. Living Wage: He argues that a "living wage" is earned through hard work and career progression, not a guaranteed entitlement. Policies that disincentivize work by capping earnings for benefits are counterproductive.
• Individual Responsibility: Savage emphasizes that achieving a middle-class lifestyle is attainable through good decision-making, saving, and taking calculated risks, rather than expecting handouts.

Youth Disillusionment and Education System Failures

• Student Loan Debt and Cost of Living: Savage acknowledges that young people face challenges like student loan debt and rising costs of living, which can lead to disillusionment.
• "Victim Mentality": He criticizes the indoctrination of a "victim mentality" in college students, arguing it hinders their ability to succeed.
• Coddlism and Entitlement: Savage suggests that younger generations may have become "coddled" and expect to start at the top, rather than working their way up from the bottom as in previous generations.
• Education System's Role: He believes the education system has failed by not adequately preparing individuals for the realities of the economy and by promoting Marxist viewpoints.
• Narcissism and Social Media: The rise of social media has fueled narcissism and envy, as individuals compare their lives to curated online personas, leading to a sense of entitlement.

Investment Strategies in an Inflationary Environment

Savage advises investors to adapt their strategies to the current inflationary cycle.

• Own Appreciating Assets: In an inflationary environment, it is crucial to own assets that increase in value.
• Precious Metals as a Core Holding: Gold and silver are highlighted as accessible and effective appreciating assets. Silver, in particular, is presented as affordable for most individuals.
• Mindset Shift: Investors must shift from spending on depreciating liabilities (e.g., consumer goods) to investing in assets that protect wealth.
• Avoiding "Worthless Crap": Savage contends that many people living paycheck to paycheck are simply spending their money on non-essential items, rather than lacking sufficient income.

Smart Money Tracker Newsletter and Following Gary Savage

• X (Twitter) Handle: Gary Savage can be followed on X at @GarySavage1.
• Smart Money Tracker (SMT) Newsletter:
  • Focus: Solely on precious metals.
  • Subscription Model: Yearly subscriptions only, to encourage long-term commitment.
  • Strategy: Focuses on buying at intermediate cycle bottoms and riding intermediate rallies, with an emphasis on patience during corrective periods and controlling greed during rallies.
  • Leverage: The SMT utilizes leverage to amplify gains during rallies.
  • Performance: Subscribers have seen significant returns, with the least making 100% last year and some achieving 400-500% with more aggressive leverage.
  • Prerequisites for Subscribers: Patience, ability to control greed, and a tunnel vision on metals.
  • Projected Returns: Savage anticipates 50-100% or more returns by the end of the next year due to the accelerating bull market.
• Accessing SMT: Search for "Smart Money Tracker" online, which should lead to the premium website or blog.

Sponsor Information

• Arc Silver Gold Osmium: Ian Everard is the owner, praised for his honesty and level-headedness. Contact him at 307-264-9441 or [email protected]. Mention "Commodity Culture" for referrals.

Conclusion

Gary Savage presents a compelling, albeit contrarian, view on the precious metals market, predicting a significant bull run driven by the breakdown of market manipulation. He emphasizes the importance of understanding market cycles, identifying the "bubble phase," and recognizing the signs of a market top. His critique of socialism and his advice on navigating inflationary environments underscore a belief in individual responsibility, sound money principles, and strategic asset allocation. He advocates for a disciplined approach to investing, particularly in precious metals, with a focus on long-term gains and controlling emotional responses to market volatility.