hedgeman

The End of Gold, Part Two

Gold will surpass last years highs and our view is extension towards 1200. If this rise happens orderly and not in a blow off top manner it may have further to go.

Anyone trying to go long without a gigantic stop loss looses at least part of his position before it moves higher. Weak longs are washed away therefore limiting supply higher up. Since it is hard to make money as a leveraged bet on gold usually this means it is not over yet. I also like the monthly charts.

I do not pretend I know why markets move where they move and will therefore choose not to "analyse" further. KISS (keep it simple stupid) shows it made a brake and has room to the uspide on a daily close above 935.

Five New Forces to Drive Gold Higher

Sometimes it is better to simplify things (taking the "why?" out of the equation)... Gold deserves to be the champion of conspiracy theories out there given its long long history but thinking too much about it doesn't help to make some money with gold.

If you just look at the market with no bias (bias meaning believing something moves due to the factors we have identified) it is consolidating. It reminds me of the time EURUSD first hit 1.367 and then fell back almost 2000 pips and consolidated until majority of short term money lost patience with it. We all know what happened later on...

So a detached view shows a very high probability gold is at a similar point in time. It will most probably go higher to some 1200$ level in 2009 where everyone will buy the 2000$/oz idea. That will be a turning point. From there it can again consolidate or move up parabolically. 1200$ coincides with a long term DX target of 65.xx and should be hit for the cycles to reach their decision points. 1200$ gold and 65 DX is where USA empire will be in front of historic jury. The vote is yet unclear.

Disclosure: Long and not in a hurry, would decrease exposure on daily close bellow 825 by 66%.