Tom Fitzpatrick: “CITI: Raising The Debt Ceiling Will Add Another Step To Gold’s ‘Stairway To Hell’ – Business Insider

Posted on :Aug 31, 2013

By: Tom Fitzpatrick

Business Insider

August 31, 2013

It’s no secret that Citi’s top chartist Tom Fitzpatrick is bullish on Gold.  Earlier this week he reiterated his call that the yellow metal would head to $3,500 in a few years.

Fitzpatrick offered more color in some follow-up commentary published in King World News.

He employs his analogy of the “stairway to hell” which tracks the debt  ceiling.

The recent “squeeze in  Gold” has sent it significantly below this “stairway to hell” chart (Debt limit)  which has continued higher.  As we said earlier, we do not believe that  this fall in Gold will be sustainable and expect new highs in the trend  eventually.  As we also said, we have retained a long-term target of about  $3,500 for some time on this Gold price based on a comparison of this period and  that seen in the 1970’s….

“As we headed towards the last Presidential election there was a  considered view in the markets that by the end of President Obama’s 2nd term the  debt limit could be as high as $22 trillion.  Then we got the sequester, a  more rosy economic outlook, tapering talk and all this has been forgotten.   For how long?

The market dynamics above combined with the change of leadership  at the Fed may well be “resurrecting that thought.”  If so, our 2nd  favorite Gold chart comes into play.

Fitzpatrick thinks that $22 trillion debt limit will  come within three years, which is when we could see $3,500 gold.

“As we continue to spend more  than we earn and shift that liability to the next generation, Gold has shown  itself to be a very effective hedge against that policy,” he said.

“We firmly believe that the Gold correction has “run  its course” and that much higher levels will be seen in the years  ahead.”

gold fitzpatrick debt limit

Gold Goliath is not your typical gold dealer.


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