Gold In 2011: Short- & Long-Term Analysis

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Gold and Precious
Metals

UUP
Dollar Chart

US Dollar
Analysis:

  • The Dollar
    rally has continued to fail over the last couple of weeks.
  • The Fed
    will print until the dollar is worthless, because that is their
    business. My richest contacts believe the dollar is going to ZERO
    within 20 years.
  • The Federal
    Reserve, with the absence of a Gold Standard, is the worst financial
    system devised by mankind, or should I say, monster-kind. There
    has never been an audit of the monster, and there is no safety
    mechanism to limit how much your Fed can print.
  • Still,
    the weak volume on the price decline in the USD over the last
    few days indicates a short term move higher is likely near.
  • A stronger
    dollar into the first few weeks of the New Year will allow a correction
    in GOLD.
  • My SuperForce
    Analysis in the paper currencies is designed to enable you to
    enlarge your real asset positions.

SGOL
6 Month Price Chart

Gold Bullion
Analysis:

  • Gold has
    appreciated very nicely over the last few days. Further strength
    will generate a short term profit booking signal.
  • My intermediate
    downside target remains 1260, followed by a blast to 1500.
  • Note the
    solid volume-based support on the above SGOL chart. Volume
    is the single most important technical indicator, and the most
    ignored indicator because it isn’t flashy. I would ask you
    to consider that profits are flashy, not squiggly lines on a chart.
    Get “intense” when looking at volume, if you want intense
    profits.
  • The Gold
    fundamentals couldn’t be any better. Big Government means:
    Big Gold. My 1260 target is a gift to you, if it happens. I see
    short term excessive bullishness in stocks and commodities; and
    the making of an improving dollar over the next month or so.
  • Longer
    term, the policies of the government in the US are starving the
    economy, failing in job creation, and feeding inflation. The “Shovel
    Ready” jobs are nothing more than Black Hole spending from
    2008 forward.
  • Consider
    the inflationary Black Hole projects; spend 10,000 dollars to
    create 3000 dollars of economic activity. I own a manufacturing
    company. I don’t pay 10,000 dollars to get 3,000 dollars.
    I wonder how eager the US Congress would be to spend 3 dollars
    to get 1, if it was their personal funds that had to be spent?
  • The
    Federal Reserve System cannot survive without inflation. The day
    they stop printing as policy, the whole system collapses.

SGOL
14 Month Price Chart

  • Analysis:
    A long term BULLISH picture, with a short term warning.
  • Note the
    MACD working off the overbought condition. What has developed
    over the last week is very light volume and strong price performance.
    That’s not ideal for future higher prices. Volume is light
    although this is traditionally a light trading week.
  • I will
    continue to shave profits off as the market moves higher and will
    start the SuperForce power 2 re-buys on weakness, meaning
    I rebuy every 2% down, because 1260 is only the ultimate possible
    target, not a guarantee.
  • If you
    are an investor who is light on bullion and other real assets
    you likely will have an opportunity to buy this correction with
    confidence.

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the rest of the article

January
1, 2011

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