Gold Stocks and Bullion Breakout!
Commodities / Gold & Silver Stocks Dec 11, 2008 - 06:32 AM GMTBy: Brian_Bloom
Change is in the wind. The ratio of the gold shares to the gold price has now given an unequivocal buys signal – as can be seen from the following 3% X 3 box Point and Figure Chart (courtesy stockcharts.com)
The gold price also broke up – as can be seen on the traditional 1 point X 3 box reversal chart below –which is calling for a price target of $905 per ounce.
Interestingly, the target as shown on the less sensitive 3% X 3 box reversal below is $1,045.60 per ounce – and (should it be reached) this would represent a breakout to a new all time high.
The chart below gives some perspective. (Courtesy bigcharts.com)
What this chart shows is:
- Gold shares are seriously oversold
- All the oscillators are calling for a rise in the $XAU
- Even a technical bounce from these levels could give rise to almost a doubling in gold share prices before the upper boundary of the downward pointing Bollinger bands is reached
In context of a gold price that is now starting to give buy signals, and a ratio of gold shares:gold price which is also giving buy signals, it seems that there may be significant upside potential for gold shares to catch up with the gold price – let alone begin to lead the gold price again.
Conclusion
The gold universe seems to be stirring, and now may be an appropriate time to start paying serious attention. It would not be surprising to see some fireworks in these markets.
By Brian Bloom
Beyond Neanderthal is a novel with a light hearted and entertaining fictional storyline; and with carefully researched, fact based themes. In Chapter 1 (written over a year ago) the current financial turmoil is anticipated. The rest of the 430 page novel focuses on the probable causes of this turmoil and what we might do to dig ourselves out of the quagmire we now find ourselves in. The core issue is “energy”, and the story leads the reader step-by-step on one possible path which might point a way forward. Gold plays a pivotal role in our future – not as a currency, but as a commodity with unique physical characteristics that can be harnessed to humanity's benefit. Until the current market collapse, there would have been many who questioned the validity of the arguments in Beyond Neanderthal. Now the evidence is too stark to ignore. This is a book that needs to be read by large numbers of people to make a difference. It can be ordered over the internet via www.beyondneanderthal.com
Copyright © 2008 Brian Bloom - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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