A Technical Look At Gold

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Featured is the index that measures gold against the US dollar. The green boxes surround the consolidation that took place before price broke out at the resistance line at the top of the box. The blue numbers represent the size of the advance from the break-out of one box to the top of the next box as it relates to the index at the right. You will notice that there is a dramatic progression ranging from 0.6 to 5.0.

Due to the fact that the US government has opted to go for an exponential uptrend in the federal deficits, this index is also going exponential. We can reasonably expect that the next number (currently 1.75 at the ‘?’) will be greater than 5.0; much greater!

The blue arrow inside the oval points to the observation that the two moving averages are in positive alignment with each other. This is the sign of a strong bull market.

Keep in mind that most breakouts are tested. Such a test in now underway. Use pullbacks such as the one you are seeing now, to add to your portfolio. The final top is still years into the future!

The reason we can state this with confidence is because the amount of ‘printing press money’ the Obama administration is throwing at the US economy guarantees massive price inflation and concurrent demand for gold.

Pretend you are in an auction hall. Just before the auction begins, a wealthy individual enters and begins to hand out handfuls of hundred dollar bills to the bidders. What do you think will happen to the prices realized at that auction?

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