Gold – 25 Jul

Gold had a great Monday and continues to respond favorably both as a safe haven from the insanity in Washington and as money. Another all time high was established and in doing so gold has made another higher high. 1581 needs to hold in order for the uptrend to remain intact. Support is right there around 1580. Additional support will come from the 18 day moving average that is rapidly climbing  and will be at the 1580 level before the week is done. RSI is over-bought and stochastic remains embedded, indicating that pullbacks should be viewed as buying opportunities. I suspect a debt ceiling deal will be made and the “all clear” signal will be given that all of the world’s problems have been solved. When this occurs it would not surprise me to see gold continue to climb. It will represent the market’s collective opinion that massive printing will not only continue but will accelerate.

Here s long term chart that shows the breakout in context of the larger trend. Is there any doubt in your mind as to where you hard earned saving should be? The “unimaginable” 1650 is within grasp. Educate yourself on why this rise in gold continues for the 11th rear in a row. Then ask yourself whether the forces that are causing this are going to change anytime soon. Is the government going to stop borrowing money? Is our debt actually going to ever decrease? Will zero interest rates continue forever? What will happen to our economy when they rise?

Here is the chart for PHYS, the real and 100% allocated gold bullion fund.It is below its all time high as some of the premium has been removed from the price due to the follow on offering of shares associated with the acquisition of an additional $266,000,000 in gold. The premium to Net Asset Value price is 2.79%, down from nearly 5% recently. So while this chart appears to be under-performing gold, it is simply giving back some of its out-performance relative to gold. Resistance is the all time high at 14.22, and support is at 13.75. RSI is not currently over-bought and has some room to head higher for the all time high. Technically an uptrend exists with a confirmed higher high and a higher low. This follows the big gap down on the news of more share supply coming into the market as a result of the follow-on offering, and then after a brief period of consolidation. This fund has a very bright future as the realization sets in that gold is the real and true safe haven. I expect the premium to NAV in this fund will continue to climb as Joe Sixpack finally starts to buy gold in his 401k or direct contribution retirement fund.

Here is the long term chart with its long term trend intact and running strong. 14.50 is the target on a breakaway from here.

 

 

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This entry was posted in Gold, Matrix Sentry TA, PHYS, Technical Analysis. Bookmark the permalink.

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