Hi IDC Holders Something to think about now that IndoChine has...

Hi IDC Holders

Something to think about now that IndoChine has completed a landmark milestone with the completion of the LIR at Mt Kare!

QE3 is ending this week! Why is this important?

The Gold Price has lifted every single time US Fed QE ended for QE1 and QE2. Remember that Mt Kare's cash cost at only $US350-400/Oz will mean this is going to be an extraordinary profitable Gold Mine! And JV investors know this! http://www.**promotion blocked**.com.au//images/emoticons/icon_smile.gif

Now that the $2.4Trillion QE3 ends this month, we will see the Gold Price rise by 10-35% in the next 2-3 months.

QE3 distorted markets for the last 2 years from constantly lifting S&P500 blue chips stocks. This is now ending

Conclusion:

US Fed QE in Operation = RISK ON INVESTING out of Gold ETFs and Cash and Into Blue Chip High Yielding Shares: While US Fed QE is on, Gold Price rises moderately / flat (QE1) $650Billion QE and (QE2) $600Billion QE or falls (QE3) $2.4Trillion QE.

US Fed QE Ends = RISK OFF INVESTING out of Blue Chip High Yielding Shares and into Cash and Gold ETFs and Gold Shares when US Fed QE ends, Gold Price rises Moderately, or Rises Significantly dependant on Risk Events geo political and economic are at play.

JUST AS IDC HAS COMPLETED THE LIR at Mt Kare!



You can see it in the Gold Spot Price vs S&P500 index chart below. The S&P500 is the index that represents the Top 500 US companies by Mkt Cap!

Inversely proportional relationship between the two, caused by QE3.

This trend will reverse into the Gold ETFs, SPDR Gold Fund and GLD Gold Fund and into Gold Stocks from the end of this month. Just as Rodan is about to start constructing the Adit in Mt Kare's Bonanza Gold Zones!





We all are aware that when US Fed QE is in action, markets are on Risk On Mode. Therefore money exits safer assets like Cash and Gold and Gold ETFs and into the Blue Chip stocks (see chart) while QE is on.

In the last 3 weeks we have seen markets begin to move in more normal fashion with bad news, market falls and VIX index rises towards mid 20s(bearish). And the Gold Price has lifted from $US 1180/Oz to $1245/Oz last night.


The combination of Risk Off Market sentiment now that the US Fed has ended QE3 this week, as well as the ECB about to activate QE, I believe will lift the Gold Price in US Dollar Terms over the coming months.

A risk event will occur, and we wont have the US Fed supporting the markets with a flood of cash, which will see the Gold Price surge towards the $1350-1450/Oz.

You can see from the second chart attached, where the S&P has surged, almost unabated from the beginning of QE3 while Gold has fallen, but hit a triple bottom.

As $US2.4Trillion was created during this time, money was being pumped out of the Gold ETFs and into the Markets chasing these rises, they couldn’t lose with the support of the US Fed.

Now that this ends this week, markets will move back into the Gold ETFs lifting Gold Stocks in the process.

Now watch as these two charts reverse their performance in the coming 3-12 months.

Cheers Nectar