Sunday, February 08, 2009

Gold - on the way to the new Highs. GDL, GDX, AUY, HUI, XAU, RMK.v, TNR.v,

Technically Gold is very strong on weekly. RSI is rising confirming new Highs, MACD after Buy cross over is going into positive territory after break out, STO is positive. There could be a possibility of a retesting break out from MA50 on a general market rally and perception that Gold trade is just a risk averse one, but we will take it only as a joke and a buying opportunity before breaking out of 1000. Risk averse? You should tell it us in October - November, when gold was crashing in forced selling with any other "risk" trades. Gold is an Inflation indicator and the only currency preserving its value in a face of massive debasement of US Dollar and other FIAT currencies. We would think contrary now to a conventional wisdom: Markets Up, Gold down and when Major banks are bullish is a sign of a Top - currency trade is when Gold is strong, it will attract new money. After crossing its MA200 Gold pushed banks to pronounce new Highs to come, based on their clients assets allocation to gold, next step is a Buy on MA50 cross over MA200 and ultimate test will be in Gold move over old high just above 1000 USD/oz. It is not any more private business of Shorts Bullion Banks in the Comex, but a bold indication of Inflation coming and deflation scare subsiding back into the corrupt history of modern finance.
We are at an important juncture when TARP2 and bailouts could expose paper Gold scam and short covering in Comex could bring us to the new Highs in a matter of weeks. After that we will expect formation of a giant CUP and Handle consolidation stage with a handle above break out from 1030 level.
More leverage will be found in Gold Miners and Juniors will define one more time risk/reward definition.
On a daily scale we expect very volatile trade before Risk Averse and Ultimate Currency qualities of Gold during Bear market rally.
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