The Gold Blog. Gold/Silver/GSMs (and a little Oil for good measure)
I first wrote this blog post in My original blog on June 15, 2009. Here is the original post (The Gold Blog. Gold/Silver/GSMs (and a little Oil for good measure) -- If you are a CAPS user, please rec the original blog post. It is one of the most important and comprehensive posts I have ever written and needs as much exposure as possible --). I have decided to update the post right now for a few reasons:
1) Gold and Silver are beginning their breakouts. And per my fundamental analysis and my Wave Counts, the patterns are very bullish for the near term and long term. Is this *THE* breakout to new all time highs, and never looking back? Or is it another run-up to 1000-1030 and then a retest of support levels down to 700-800. I don't know. And more to the point, I don't care. Gold is about value and preserving wealth over the long term, through the current and future inflationary policies of the Fed and Treasury and the next crisis in the continuing financial meltdown. More on this point further in the post. But this next move is setting up to be a potentially significant technical event. Which way it breaks is a matter of opinion and debate. I am in the bullish camp. But moreover, I am in the *long term* bullish camp. I am a fundamentally engaged gold investor and have been for years now. So my opinions on this matter should not be read from a traders perspective. I have bought on all pullbacks, but I will also buy in a confirmed move above 1050. The peaks around 1000-1030 have been resistance for a long time. But based on the size of current short positions in gold, a move to 1050 could set up some massive short covering and fuel the leg of the next large bull move in gold.
2) I am a huge dollar bear. I have written two large posts on the US Dollar (Thoughts on the US Dollar, Analysis of the USDX Long Term, Follow up on the Gold Blog Jun 17, 09 and USDX Count Update and Thoughts Aug 12, 09) and while I agree that we will get a bottom in the Dollar that should last for a couple of months, it is *extremely* important to understand the long term trends of the US Dollar (down) and the fact that all fiat currencies eventually trend toward their intrinsic value (zero). This is not a gold bug statement. Look at the history of all fiat currencies. We even have dead United States currencies, since the US has been in existence! Anybody who thinks the Fed will not try to inflate their way out of this mess, or thinks there will not be political pressure to inflate the money supply or increase the debt ceiling on the US National Debt, really does not understand history or the willingness of politicians to dismiss sound economic policies in order to "look like they are doing something".
So this post is a repost/update to the original post. It has all updated charts with new annotations and revised counts (where necessary). Also I was playing around with a few numbering/coloring schemes when I wrote the original post, and all the charts in this new post are compliant with my EWP Numbering Scheme
Original Post is here: http://marketthoughtsandanalysis.blogspot.com/2009/09/gold-blog-goldsilvergsms-and-little-oil.html
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