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Gold Major Breakout

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Yesterday was a day of MAJOR IMPORTANCE, for gold broke out to a new high as we cam on its 8-month chart below, in the process finally clearing the big resistance at last year’s Dome top. This move has all the signs of being genuine, and thus is not believed to be a fakeout. We appear to be moving towards a MAJOR OIL PRICE SHOCK, which is likely to derail the fragile and debt induced global economic recovery, which as we know was never genuine to start with. If the train of events continues in this direction gold should easily reach the $1600 area in fairly short order, and $2000 is not out of the question for this move. It is important here to note that we are in a totally different ballpark to 2008, as we are in a situation where geopolitical instability and rising oil prices help to collapse world markets while the price of oil and and Precious Metals soar in unison.
 
At first sight silver’s latest chart gives cause for concern, as it has has once again arrived at the “bullhorn” target line that we had earlier delineated, and is clearly very overbought. However, given that gold’s breakout looks genuine, and to be <I>just the start </I> of a major uptrend, it appears to be very probable that, overbought or not, silver will vault above this line shortly to embark on a vertical, or near vertical, ramp phase.
Up to this point Precious Metals stocks have woefully underperformed the metals, but this is expected to change soon – they should finally find their feet as gold and silver accelerate to the upside, so we could at last see them racking up some really large gains. We will therefore be looking to flag those stocks that look likely to make the biggest gains.
 
 

http://www.clivemaund.com/



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