Breaking $1,000

Dines Letter (06/08/2009)
"I want to emphasize my forecast repeated in the last two letters because I cannot stress enough the importance of gold breaking through $1,000. When gold breaks through $1,000 it is 'game over' for the gold cartel. The cartel will of course still be there fighting—trying to control and maintain an organized retreat to keep gold from soaring. But once $1,000 is cleared, the cartel's retreat will be hastier and less organized. In other words, look for gold to climb rapidly.

Therefore, to repeat my forecast from the last two letters, now that $915 has been hurdled, 'we can expect gold to rally to the neckline at $1,000, completing this H&S pattern.' Gold is now doing exactly that.

The other important part of my forecast so far is still pending and yet to be achieved: 'H&S patterns can be used to project near-term price objectives. The depth of the H&S pattern represented approximately a 30% correction (gold fell from $1000 to $700). Therefore, it would be normal for gold to exceed the neckline by 30%, which projects a $1,300 gold price when the neckline [$1,000] is eventually hurdled.'

My conclusion has been that '…we should be focusing on $1,300 gold as a near-term price objective.' That remains my near-term price target—i.e., it is a level that I expect will be reached sometime this year, which is consistent with my annual forecast for 2009 made back in early December. . .So the question now is whether gold is ready to finally break above $1,000. I think so because everything is lining up nicely for gold."

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