Gold bulls have endured a long and frustrating year. Gold continues to move sideways. I believe the breakout will be to the upside, for a number of not-so-thrilling reasons.
First, the growing tensions between Iran and Israel seem to be close to boiling point. Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak have almost finally decided on an Israeli strike at Irans nuclear facilities this fall, and a final decision will be taken soon, Israels main TV news broadcast reported on Friday evening. ~ The Times Of Israel newspaper, August 11, 2012.
A number of high-ranking politicians in Israel argue that Israels military is not adequately prepared to manage a military reprisal attack from Iran. That doesnt seem to bother the pro-war crew.
Wars often progress a lot differently than originally envisioned by the war mongers. Unfortunately, I believe the continuing triangularization taking place on the gold chart reflects the growing possibility of severe and prolonged military conflict, between Iran and Israel.
Please click here now. Gold is coming off a six-day win streak, and coiling within a very symmetrical triangle pattern. A downside break is possible, but unlikely. The upside target is approximately $1710.
The quantitative easing issue has been relegated to the back burner by most analysts, but there has been a subtle change in the statements of Chairman Bernanke, and the statements of a number of key Fed governors.
Bernanke has begun to speak about the possibility of doing more if jobs numbers dont improve faster and more significantly.
Please click here now. You are looking at the Federal Reserve System, which is made up of twelve regional banks.
If you click on the cities of Boston and San Francisco (first and last on the list), you will see the president of each bank.
Both Eric Rosengren (Boston) and John Williams (San Francisco) are now publicly advocating not just more QE, but open-ended QE.
How many more governor bowling pins will join Rosengren and Williams, if employment numbers dont pick up dramatically before the election?
QE was supposed to jump start the economy and prevent a double-dip recession. I dont see any double dip recession coming this year or next year, but growth is stagnant, and debt continues to grow. Open-ended QE means monthly QE with no specific endpoint.