Last Friday Gold surged US$37.50, crossing the US$857 oz. resistance, touching US$903.50 oz., and settled back to US$895.30 oz. on the close. That move suggests that there is huge buying power in the Gold market, and shorts are covering. Frequently after a breakout a market will back and fill, but the Gold players now are calling last week’s action with the breakout they have been expecting since last November/December. If that be the case, the price of Gold should rise to challenge the next resistance level at US$ 920, confirming a firm up-trend.
The Gold Bugs say this: Always invest with the primary trend. Gold’s primary trend is up, targeting at least $3,130.00; silver’s primary is up, targeting 16:1 gold/silver ratio or $195 .66; stocks’ primary trend is down, targeting the DJIA at under 2,900 and worth only one ounce of Gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.
Popularity: 7% [?]
January 29th, 2009 at 9:00 am
Do you honestly think Gold will go to 3130? I think trends are great, but they don’t just go one way.
January 31st, 2009 at 12:15 am
I guess I don’t see the significance of Dow2900. Using Fibonacci support points, Dow 3900 would be somewhat significant (23.X%) Fibonacci support point if the Reagan Bull is dead. I think it likely is even though the Dow hasn’t pierced the 50% Fib line (S/P500 has).