Where's Gold Going?
by Richard Russell Recently by Richard Russell: Something's Brewing
"The nearest thing to eternal life we will ever see on this earth is a government program." ~ Ronald Reagan December 10, 2012 – Where's gold going? – As you can see on the chart below, gold has formed an almost perfect rectangle. The top of the rectangle has been tested three times, and each time gold was turned back. Obviously, there are some powerful groups (the shorts) that do not want to see gold move into and above the 1800s. At the bottom of the rectangle, gold has found support at approximately 1575. For the last two weeks, gold and the dollar have moved in unison, which is most unusual. At the bottom of the chart we see the slow stochastics, which are in the neutral or middle zone. Since the bull market in gold is still in force, I would expect gold, ultimately, to break up and into the 1800 + zone. One caveat – After rising for 12 years in a row, I expect the bull market in gold to produce a final upside blow-off. Bull markets don't usually die with a whisper and a snore. Often prior to a final upward explosion, we will see a sharp correction, and I have expected something like that for gold. The final correction serves to clear the air and readies the market for a climactic rise. One reason why we may not see the usual correction in gold is that most of the world's central banks are now accumulators of gold on any weakness. Both China and Russia are now eager buyers of gold – both have a small percentage of gold in their reserves. It's also significant that most Americans are afraid of gold, even though it has risen year after year for twelve years. Imagine the following a stock would enjoy if a given stock had risen twelve years in a row.
Reprinted from 321 Gold. December 14, 2012
Copyright © 2012 321 Gold
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