-- Posted Wednesday, 2 September 2009 | Digg This Article
| | Source: GoldSeek.com
Dec Gold: Open= 958.1 High= 982.4 Low= 952.5 Last= 979.2 +22.7
The six-month consolidation in gold appears to be ending. After months of winding tighter in this spiraling pattern, prices have popped after being squeezed, as bulls and bears fought for control over this market. During this time, stocks rallied, crude and energies rallied, yet gold remained stuck between competing forces. Eventually one side would tire and back down.
Today's break-out above the previous high in the consolidation pattern, and move beyond the descending trend-line, is the signal which traders have been looking for to enter this market. Others have down the heavy lifting, now its time to join the winning side of this fight. Prices in a consolidation pattern tend to break out in the direction of their last trend, which in this case was up. From a technical perspective, the market should move about $130 in the direction of the break-out (the size of the move from the highest-high to the lowest-low in the consolidation pattern).
So why gold? Times are changing. The U.S. Dollar is being challenged as the global reserve currency and mounting budget deficits and unfunded liabilities are devaluing our IOUs in the meantime. There is the issue about inflation but arguably inflation is not driving this market higher yet, though it certainly could in the future. Enough people feel it is a risk to own paper currency, or too much of one kind, and are putting a bit more faith into something tangible: gold. Is the sky really falling? If enough people thought the sky was falling, would you argue with them or start selling hard-hats?
Gold is a clear buy. Good trading dictates that one plays the breakout, even if for simple technical reasons. One look at the chart screams a buy signal, no matter if this were gold, cotton, or chicken’s feet.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
To open an account and receive trading recommendations on gold futures or options contracts (also stock indices, energies, currencies, etc.), or to use our online paper trading service BriteTrak, contact me at tom@altavest.com. Visit www.altavest.com to request a Free Trading Kit. Keep in mind that there is risk of loss in all trading.
Thank you,
Thomas Hartmann
Altavest Worldwide Trading, Inc.
800 994 9566 x109
949 488 0545 x109
Fax 949 488 7625
tom@altavest.com
www.altavest.com
-- Posted Wednesday, 2 September 2009 | Digg This Article | Source: GoldSeek.com
