If gold can hold around the 20-week average through this cyclic low, it will be getting a higher low than December and be similar to pullbacks found in gold’s strongest bull markets. New highs are expected soon after penetrating the resistance line from December 3rd.
But if prices continue to fall then the pattern will have the appearance of an A-B-C from December 3rd and the projected downtrending support angle from December 22nd will offer a support at $1,055 +/- $5. A spike down into this level would make a buying point for aggressive traders. This action calls for a labored advance in coming months with a targeted upside range of $1170 to $1190. For more details, go to http://short.to/14tao
Could inflation increase gold’s price? At the recent major inflationary period (1977-1980) gold prices increased from $150 an ounce to $850 an ounce – almost sixfold. At present, gold prices are up fourfold without inflation. Unless you believe the government will stop spending and printing, gold prices are bound to rise.
This year, discussions will move from deflation to inflation. Inflation fears will increase gold prices higher in 2010. Similar to gold’s price corrections of 2005, 2007 and 2009, pull backs will be seen as good buying opportunities. So it’s not too late for long-term investors to purchase gold right now, even if they have delayed riding one of the strongest and longest-lived gold bull markets in the history of money.
“There is investment demand for gold from everywhere,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “The dollar has pushed gold to new highs. Gold is in an uptrend, and there is no sign that the trend will stop.”
http://www.bloomberg.com/apps/news?pid=20601101&sid=a8Hv225HZg_0
Gold has long been favored by a fringe of the investment world, but this year some of the world’s leading hedge-fund managers have loaded up on the precious metal amid concern government efforts to avoid another Great Depression that could undermine major currencies and fuel rampant inflation.
John Paulson, who scored about $20 billion of profits for his hedge fund between 2007 and early 2009 wagering against the housing market and financial companies, is launching a fund dedicated to buying up shares of gold miners and other bullion-related investments, according to three investors.
Gold prices have risen 11% over the last two weeks as the world awakens to the economic realities of 2010 and beyond. Gold prices surged over $1,100/oz. so far in November on central bank buying as Fedspeak failed to boost the buck. So much for the “strong dollar” policy we are being told about. Gold has been a bright example of how strong are dollar policy really is.
Gold is soaring Monday, trading at $1131 per ounce. President Obama is in China, calling for a new relationship. New relationship, indeed! On the surface of this visit everyone is smiling. Immediately below surface the dollar is falling–again. China’s right, the U.S. government wants to inflate its way out of debt. Why does the Fed want inflation? It is very simple: If you carry a lot of debt, inflation is your friend. The dollar will not be.
In February 2009 Zimbabwe was the only country in the world without debt. Nobody owed anyone anything. Following the abandonment of the Zimbabwe Dollar as the local currency all local debt was wiped out and the country started with a clean slate. So the simple answer to being deb free is hit the reset button. But what happened to your money in the bank??? I guess it was wiped out with the debt problem.
Commercial real estate is somewhere between an orderly massacre and a disaster.The value of real estate is down anywhere from 25 to 75 percent,” William Mack, founder and chairman of Area Property Partners, a real estate investment fund, told CNBC. The four keys to restoring this confidence, according to Mack, are: making sure consumers have jobs, rising home prices, access to credit and an increase in their 401k. Bottom line is if we don’t see things turn around we are all in big trouble.
Since 2001, four consecutive Treasury secretaries have made ‘a strong dollar policy’ the cornerstone of their rhetoric on the U.S. currency. Over that period of time, the currency has lost nearly a fifth of its value. Hint to the current Treasury secretary: it’s not working. Here are three ways Federal Reserve and the Treasury could stop the dollar’s decline without changing current policy too much. #1: Change the rhetoric. #2: Build a credible plan to reduce deficits. #3: Coordinate policy with Europeans and other foreign central banks. I don’t think we will see any of these, but it’s sure is nice to dream.
