Thursday, September 4, 2008

Gold Update

Trend & Value is now bullish on Gold and selected commodities.

after Gold hit a low August 14 the currencies hit multiple new lows into this week. the Euro found a new low six days of the last three weeks (including Sundays). the Pound (or 'Ounce' as some have taken to calling it) dripped to new lows a full ten (10) different days. oil and gas hit new lows in dramatic fashion. even mining stocks got clobbered again this week. but Gold (and Silver!) have so far refused to collapse.

before I continue here, allow me to say a couple words about the oil market. 1) I Told Ya So. 2) the likelihood of a material supply disruption in the world's largest commodity market, in a commodity that's sourced from thousands of different places, and for which there exists absolutely no scarcity of existing inventory, is practically nil. matters not whether the proposed disruption cometh from weather patterns or war.

back to Gold. while I can't say with certainty that correction is over, I consider the probability of such to be quite high. the market is in a better position than at any time in the last 12 months. but to remain bullish I want to see an immediate rally to at least above 850 and silver above 14. if we get that, then we'll watch the pattern of the subsequent correction to determine whether, in fact, Gold has now entered into Wave Three of its primary bull market.

if a severe liquidity panic develops in the near-term this outlook may need to be revised. I'm actually looking for a panic of some degree (still long the nippy), how the metals react to it will be interesting. if we get one that is.

as I've been writing this, Gold has fallen off several dollars and Silver's down over 20 cents from the high point a couple hours ago. very touch and go action. expect a few more cliffhanger moments before a real trend takes hold, whichever direction that trend takes us.

if you have been waiting to buy physical metals you should get started now. my pal Lou Lindstrom at Investment Rarities is friendly, knowledgeable, and very reliable. you might consider placing an order with him. his number is 800.328.1860.