An Epic “Repeat” Run-up In Gold

History doesn’t repeat often, but if what I’m seeing in the gold market is correct, we’re set for an epic repeat run-up.

With ambiguity filling the heads of most gold analysts, this latest set of data points may be the trigger that we’ve been looking for.

Plus, as you’ll see, this could be a gold bull’s dream come true and possibly the last no-brainer buying opportunity that we’ll see for years….

The recent price action in gold has been hard to decipher to say the least. Other than a consolidation pattern, that we’ve highlighted in the pages before, there really hasn’t been much telegraphing of gold’s next move.

Specifically, since last year’s highs over $1,900 gold has pulled back as low as $1,540. Now with prices buoyed over $1,600 the market has entered a holding pattern, waiting for the next big move.

That next move, as I see it, is getting much closer – and will vault the metal quickly to the $1,750 mark.

Besides our usual bullish tendency for precious metals, (my goodness, there’s a global currency crisis unfolding in front of our eyes!) I have two brand new reasons why gold is set to spring higher.

The first has to do with an interesting chart setup I saw this morning.

You see, today’s chart pattern looks strikingly similar to what happened during the last major gold pullback in 2008. Back then the gold market pulled back after it hit all-time highs over the psychological $1,000 mark. But when the global monetary powers that be pressed the “print and spend” button, gold didn’t remain low for long and shot to new all-time highs within a year.

Today’s market is setting up in a similar way.

After pulling back from a recent psychological high, the chart looks set to resume the longer-term trend. Take a look…

As you can see, we’re not in uncharted territory here.

If we follow the same chart pattern from 2009 we could be set for a quick run-up to recent support at $1,750 – and on our way to all-time highs above $1,900, even by the end of 2012.

Frankly, the only line of thinking that breaks this chart pattern is for kooks.

Maybe they think austerity in the Eurozone will work?

Maybe they believe Ben Bernanke will stop fooling around with the U.S. money supply?

Maybe they believe China (after all of these years) will curb inflation?

Well, I certainly don’t believe any of that nonsense. In the meantime, let’s leave those thoughts to the fools that believe them and instead take advice from a smarter stable of folks.

Which brings us to the second reason why gold’s next breakout is right around the corner…

The Largest Holder Of SPDR Gold Is Buying…

If you don’t know what a “Form 13F” is, today is your chance to find out.

The government Form 13F is a regulation set forth by the SEC that forces money managers who control over $100 million in assets to disclose quarterly trading information. The Form 13F must be turned in to the SEC 45 days after the end of the quarter in which the trading occurred and is then made public.

For the calendar-loving financial nerds out there, yesterday was like Christmas. It’s Form 13F Day!

These 13F documents act as a window into the minds of prolific fund managers. They also give us a concrete look as to where the smart money is flowing. For today’s discussion it has to do with one savvy fund manager’s big bet on gold.

Hedge fund manager John Paulson made a lot of cash shorting the housing bust in 2007/2008. So to say he knows a thing or two about forward-thinking investments is an understatement.

He also made a heckuva lot of money parlaying his housing bust cash on gold’s epic run-up.

Today Paulson is back to buying gold, by the fistful.

According to Form 13F documents filed yesterday, his fund is making a big bet on gold’s next move. In particular, Paulson, the largest holder of SPDR Gold Trust (GLD: NYSE) shares, is adding to his position. It’s a move that proves Paulson is still prepping for a wave of inflation.

In fact, according to Bloomberg, “The last time his stock portfolio had a bigger concentration in gold-related equities than last quarter was March 2009.”

Paulson is buying like March 2009, eh? That sounds familiar (and looks familiar on the chart above.)

It’s also the last time that gold was a screaming buy.

Keep your boots muddy,

Matt Insley

An Epic “Repeat” Run-up In Gold was originally featured in The Daily Resource Hunter. Check out the newest Daily Resource Hunter research video “The Price of Gas Explained”.

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