Commentary

Gold Breakout appears imminent
September 2nd, 2009

There have been no updates on this site for the past 12 months for which there are a variety of reasons, not least of which is the fact that gold has been in a holding pattern for most of that time while world events have unfolded around us.
However, I believe we are on the verge of a breakout in the price of Gold. Its broken above $960 which has been near term resistence but the bigger carrot dangling at $1,000 is still ahead of us. Momentum is building and it is now only a matter of time before that level is breached once again - this time may be the one where that price sticks and instead becomes a new floor for the gold price.
In-depth updates will resume very soon......



Fannie and Freddie go bye bye and why now is the time to Buy Gold stocks
September 9th, 2008

Sometimes you have to take a step back.
Despite the price of gold and silver being under pressure recently, the fundamental reasons for owning the metals have never been better. On a relative basis, Gold is actually hanging in there pretty well around a low of $795 versus silver's larger decline recently down to $11.85 in overnight trading. Where these prices go in the coming days is anyone's guess but demand for the physical metals is strong in India (up 45% in August versus a year ago after having a very slow year up until that point) and also in the Middle East. European and North American sales are also said to be rising and shortages of gold and silver coins are being reported from all over the globe. While larger orders of the materials are still being met, the fact that an $800 gold price is  seen to be inexpensive by a large number of people across the globe has to be seen as a positive sign. As for gold stocks, they have been beaten down mercilessly, especially so in the past week where new lows for the major Gold indices have arrived as investors show signs of panic. Note, panic is a good sign that a bottom is near. The exact opposite is happening in the general equity markets which shows no sign of panic whatsoever and in fact the Dow Jones was soaring yesterday on news of Fannie and Freddie being effectively nationalised. The US dollar miraculously went up a full point on the index and now looks incredibly over-extended on this rally from multi-years lows it hit just a couple of months ago. With the billions of dollars that are to be pumped into F & F to save them from bankruptcy, a highly inflationary scenario is being painted for further down the road. All the talk right now is of 'deflation' but we believe this is incorrect and the temporary drop in Commodity prices will turnaround over the next few months and the emphasis will move back to that of an inflationary environment. The Chinese Government are said to be mulling over a large stimulus package for their own economy - apparantly 8% growth is not enough for them.
The odds favour a pullback in the US Dollar in the near term and a rally in gold and gold stocks before the end of September. Remember, this is seasonally the strongest time for Gold and the second half of september especially so. With so many people ready to declare the end of the Gold Bull Market already, it may just be a very good opportunity to add to quality positions in the sector or top up on physical Gold and/or Silver.


Outlook for the Gold sector
August 28th, 2008

Gold is at $830.
Going into the Autumn months, the outlook for the gold sector has improved considerably from just a few weeks ago.
Selling pressure has for the time being subsided and although sentiment is still quite poor across the sector, to a contrarian, thats actually a Bullish indicator. Commitment of Traders reports shows a liquidation significant enough to suggest that much of the hedge fund presence has gone for now. This is a good thing. When the Funds start to rotate money back into this sector, then it will move up very quickly.......click to read full article