Gold Getting Charged

While analysts from Kitco to Australian dealers expecting a breakout and rally in late September it is interesting to see this developing.

Remember, although all the fundamentals may be at play and even getting stronger over time, price appreciation doesn’t not move in a direct line. Thus, at this point what many speculators are looking at is the technical analysis and information from the COMEX.

Again the Commercials have covered many of their shorts, which has always preceded the rally. Long contracts are also lower giving much room for additional buying.

The HUI Gold Index is showing strength breaking out above its downtrend and rising 14% over the last month, while gold is still struggling below 680. The real test will be at 720, its 25 year high and then its intraday high of 888.

Essential market history and human psychology has shown that the third rally of each trend is often the strongest.

Although the Precious Metals continue to show strength we believe that silver will again test its support level of 12.50 and gold at 625 before bursting onwards.

This may be psychological or even technical but it has done this on the past and may do this in the future. A good strategy would be to sell into the strength. If the course reverses sell everything and await a bottom.
If these levels are met it will be most definitely welcome as the end of the consolidation stage with 1250 gold and 30 silver in order.

Once again, these are mere speculations based on my experiences in this market. This has nothing whatsoever to do with investing or securing your wealth with precious commodities of material value.

As the Motely Fool Value Investor’s mantra goes: “Down Baby Down!”


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