The World of Gold

Deliberations on World Markets (05/06/2009)
"Some key numbers for Comex Gold are $918, $968, $1,008 and $1,034. Those are the lower peaks it has left behind, and a move above each of them would be expected to add some upside impetus. On the other side, breaking the mid-March low at $865 would be a setback.

The 200-day MA has rolled over modestly, now around $857 and should proffer strong support. The 50-day MA is around $912 and slipping modestly. We were above it earlier today, before the late sell-off. I flag these parameters as thresholds from which acceleration might develop, and I view the big pattern dating from the March 2008 peak as a launching pad if, as and when we break through it. The crossing of the 50-day MA above the 200-day MA in February sustains my expectations of an approaching upside breakout.

I expect dollar weakness may be the trigger event, particularly if one of the approaching Treasury auctions is a shocker with foreign buyers not stepping up.

The gold mining shares crash in October was extraordinary, and the brisk rebound took them right back to the point of their breakdown where they've basically run out of steam. A rush of new share issues mopped up a lot of demand, while the Bullion ETF has boosted its holdings 42% in 2009 so far."

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