GOLD HAS BROKEN! Expect $2,200.00
James M. Carrillo
Technically gold hit its last
area of resistance when it hit $1,680.00, we now have a major breakout with
a weekly close above the $1,680.00 level this Friday. This is an all out
buy signal on all three technical models (long term, mid term and short
term) and should not be ignored. Very rarely do you see all three technical
models screaming to buy or sell with such strongly matching fundamentals.
This should trigger massive
fund buying and a rapid resumption of the bull market in gold. The
fundamentals for gold have been very bullish, but technically it has been
in a corrective phase since September.
With interest rates at
historical lows and a Fed commitment to keep them low until the end of
2014, massive government spending and loose monetary policies, inflation
will begin to raise its head as the Fed wishes. People will begin seeking
yield over the coming months and years as the Fed attempts to reflate the
system. Make no mistake, these loose monetary policies are intended to
Lately the US Dollar has given
people the illusion of a safe haven however, the dollar isn't really a safe
bet at all it's short term rally has been because people have had paralysis
with what to do with investment monies and that it is perceived a safer bet
vs. Euros. With that much demand, the dollars rally was ridiculously weak.
Fundamentals dictate that the dollar is the worst place to park money over
the short, mid and long term. When the technicals of the US dollar change
to reflect its true fundamentals, gold will most likely go into a
hyperbolic surge. I still see gold prices nearing a 2-1 ratio with the
stock market, as it has in past decades of economic stress or possibly
closer to a 1-1 ratio as it did back in 1980. At today’s level, that
would mean gold would be, at minimum $6,000.00 with the Dow at 12,000 some
point during the decade.