-- Posted Friday, 29 August 2003 | Digg This Article
In the last issue I detailed that bullion had broken above the critical $355 resistance and was on its way to he $395 level. Last week on Wednesday a $10 hike in the price the moment Comex opened trading in gold confirmed the break out and moved to test the $400 level. Thus I am completely relaxed about the precious metal prices.
I continuously read Elliott Wave analyses that this is just a bear market rally and that bullion will turn back below the $252 region. I continue to discount all such analyses as amateurish as they fail to take cognizance of the movement of the share prices. I again reiterate that you do not have share prices increasing by 600 to 1000% in a bear market rally!!!
I remain absolutely convinced that the gold stocks MUST move back above their highs of May last year. The plug is in, the bases have been formed and all that is left is for the prices to confirm the move in bullion.
But gold is not my main concern at this point of time. That honour belongs to the Dow. It cannot make up its mind whether to break into a new bull phase that can run up to 10 000 or fall under the critical 9 000 support that will signal a collapse to retest the 7 000 lows. My data is still heavily indicating the downside tack, but this will not be confirmed until the 9 000 has been tested and penetrated.
Frankly there is not much to say. I have continuously detailed that the gold and silver stocks were looking fantastic with Coeur d’Alene rated as a must buy. Since then it has appreciated 50%!!
We are watching an historic event, the flight from paper into tangible assets. Stocks are bust, bonds are bust, the leading currency is bust, property is about to go bust. Investors are going to look for capital protection, they are sick of all the hot shot advice to make money out of stocks. Capital protection remains the global objective as I see it. This is not protection from the eroding effect of inflation but from total loss of capital in unstable markets.
History is very close at hand as the gold price in Swiss Francs is has broken upside and that is my indicator of a massive change in global investment attitudes. But also note that gold is outperforming EVERY major currency.
What does that say about global economic conditions? Investors are voting with their feet into tangibles and out of paper. Forget all the doomsday Elliott analysts. Ignore all the supposed growth data form the US economy. Just look at the gold and silver charts and make up your own mind.
Gold Action is a fortnightly commentary on global gold and precious metal markets produced by Dr. Clive Roffey who has been a leading independent commentator on gold markets since 1969.
Contact email : chartist@mweb.co.za : website www.shareaction.co.za
I have so often detailed the gold price in Swiss Francs and the huge implications for global investment. It has broken upside above the critical neckline level. This has devastating consequences.
A non interest bearing yellow metal is now outperforming the world’s leading investment currency. In fact it is outperforming virtually ALL currencies.
Why are investors looking at gold and not the safe haven currency? They are detecting a major event or series of events that are about to send classic investment strategies in the rubbish bin.
Only the wide awake investors who are willing to take an obtuse view of markets will survive. This is an exercise in lateral thinking, not blind acceptance of traditional investment norms.
This is the most important chart in the book.
Ponder it, analyse it and take action in the gold and silver markets.
- more for subscribers -
Dr. Clive Roffey
www.shareaction.co.za
info@utm.co.za
-- Posted Friday, 29 August 2003 | Digg This Article
