Gold Bullion on a Tear: What Next?

I have just arrived in Geneva after an exhausting but hugely successful few days in Ljubljana, quaint capital of Slovenia. It is rather difficult to write proper posts while on the road, but I will do my best to feed interesting snippets through - that is, when not investigating how the gnomes see the future of Swiss banking.

Gold hit a new peak after a drop in the U.S. dollar to a 15-month trough, resulting in the precious metal recording an eight-day winning streak. According to Bespoke, the current run represents the seventh time since 1980 that gold has had a streak of eight or more consecutive days with a gain. The report said:

As shown below, the only time one of these streaks went for more than eight days was back in 1982 when the ninth day was also positive (on the tenth day it fell 5.7%, or $63 in today’s prices). Looking out over the next week, there has been little consistency in the results as periods of negative and positive returns have been evenly split.

Source: Bespoke, November 11, 2009.

Meanwhile, if you are looking for an explanation for gold’s strength that goes beyond the weak dollar argument routinely offered, spend a few minutes to read Mish’s recent post entitled “Budget deficits soar out of control in Eurozone, Germany, U.S., UK, Japan; yen’s last hurrah“. Then consider as an investment option “something that has no budget deficit” (in Mish’s words).

Fellow-bull Adam Hewison of INO.com expects a possible consolidation or correction before gold advances further. He explains his thinking in a short technical analysis presentation you can access here. As said a few days ago, I remain bullish on gold in the medium term but, given its notorious volatility, will only do additional purchases on pullbacks.

Click to enlarge:

Comments

[Alex Bernstein:]

The next move in commodities should be in rare earth metals, such as Europium, or Lutetium, because of their use in defense and telecom industries. Would someone suggest stocks traded in US stock markets that have relative pure play in these commodities?

Nov 12 07:27 AM

[PatrickGann...:]

Thursday,November 12,2009----8:37am/Pacific Time to 9:14am----37 minutes EFFORT !
(or 11:37am to 12:14pm Eastern Time !)

Save/Print & share/Email to friends & family/E-Forward/Bookm...
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Dear fellow GOLD investors & speculators :


Copyright November 2009 by Patrick Gannon & PatrickGannon1938 of Vancouver,BC,Canada..
All rights reserved.No reproduction in whole or in part.Thanks.

Legal disclaimer-----None of the info is to be construed as a buy,hold,SHORT-SELL
OR sell decision !!!!!!!!!! Consult a professional and/or your own financial adviser.
Thank you.


Hello !
How should YOU feel about GOLD right now----Mid-November 2009 ??


I think the following will CLEARLY lay out solid FUNDAMENTAL ANALYSIS (!!!)
and TECHNICAL ANALYSIS (!!!) for you to PROFIT from & learn MUCH from
----Right NOW !


1) November 12,2009-----Why GOLD will BOOM in November & December 2009 !
----The PatrickGannon1938 viewpoint ! :

seekingalpha.com/insta...


Enjoy & profit MUCH !

Sincerely & profitably yours,
In good karma i trust,

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(My favorite place to relax & unwind !),
PatrickGannon1938,
Patrick Gannon,
Vancouver,B.C.,Canada

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Nov 12 12:18 PM

[Darrell:]

Hi Alex:

From what I read in the FT and other financial publications, China is using their vast dollar holdings to buy rare earth metals.

Hoarding currencies at low interest rates are not as popular now.

Nov 12 05:26 PM

[Trend Surfer:]

What's next is simply a correction in precious metals and Oil as the USD have put in a double bottom on the daily chart and a Morning Star Candle in the weekly chart. It seems to be completing a hammer for this week.

Seems that Hewison's gold consolidation has likely arrived.

Nov 12 06:50 PM

[KIT:]

Debtonim will chain react into Inflatonium


On Nov 12 07:27 AM Alex Bernstein wrote:

> The next move in commodities should be in rare earth metals, such
> as Europium, or Lutetium, because of their use in defense and telecom
> industries. Would someone suggest stocks traded in US stock markets
> that have relative pure play in these commodities?

Nov 16 03:53 AM