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“Three precious metals stock indexes all show
prices above 20 and 50 day moving averages.”-Traderrog
Charts courtesy of Decision Point
Gold Miners Index (GDM) is our favorite
Gold & Silver Index (XAU) remains popular
Our more popular gold and silver stock index charts indicate rising momentum after completion of a standard five wave rally and are now correcting in a typical A-B-C pattern. Continuation of rallies in both the stocks and metals are forecast. April gold futures touched our break-out goal above $662.50 and corrected back to $650 support. Expect a second or third breakout attempt to hold and rally higher.
Amex Gold Bugs Index (HUI) is comparable to GDM and XAU with prices above moving averages, earlier formation of bullish double bottoms, and positioned today for seasonally correct rallies.
The U.S. Dollar and specious jobs data conspired to produce a weaker January performance for gold. Yet, after January 22, the dollar began to weaken and gold received a good boost. One report said a major hedge book was unwound at the end of last month which contributed to new found strength. In any event, the month ended firmly with gold at $650 and silver above its support near $12.50.
Trader Tracks sees new and powerful fundamental forces for gold and silver. Several new gold ETF’s will be launched this month in India which is the world’s Mother Land for gold ownership. In our view, this event will not only drive gold prices further and faster but steadily take large amounts of gold off the open markets for ETF backing and solidity.
Another major event was announced today as the EuroNext trading platform in Europe is opening futures and commodities trading on a long list of markets and sectors similar to those currently offered in New York and Chicago. Among those markets are precious metals products. While difficult to measure accurately, precious metals global awareness is now entering some new doors offering enormous market purchasing capacity. As gold and silver propel their prices above $740 and $15.20 recent highs, we forecast a literal explosion in new buying across the board. This will include physical metals, treasury coins, stocks, futures and commodity buying along with options on just about the entire PM marketplace.
As they say, timing is everything and we cannot suggest a better chance than now to enter these markets with the normal precautions to participate in what we feel will be the largest precious metals market in recorded history. Please remember, gold would be priced today near $2,000 per ounce if it were adjusted for inflation. Also, the Dow Jones Industrial Average would, if similarly adjusted, be valued at -64% of today’s posted price.
Yes, we shall see some intermediate profit taking price adjustments, as they occur roughly every 46 days or so. This is only market noise and should be treated as a further opportunity to add to your positions. If you are shy about trading and have little experience we suggest buying the gold and silver coins of Canada and the United States. Have them delivered to your bank but take them home and hold them in your possession. If these valuations exceed what could be considered safe, hold more of them under bank trust in Switzerland or Canada for safer storage.
–Traderrog
*****
Roger Wiegand is Editor of Trader Tracks recommending trades for gold, silver and energy markets using futures, commodities, stocks and options.
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