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First, from Richard Russell, Clive Maund below:
Gold – From its July 1st low of 1482, gold has risen almost in a straight line to July 13th high of 1585, a spectacular rise of 103 points. Obviously, gold is in need of a rest or even a correction.
For long-suffering holders of gold mining stocks, however, “green shoots” (remember them?) are beginning to show. Below we see GDM, the gold miners index, shooting high into the 1600s and bettering by a wide margin its preceding peak. Score a big gold star for the gold miners.
A second look at the gold mining stocks is provided by this P&F chart of GDX. Here we see an upside breakout with a P&F target of 74.
Finally, just to emphasize the situation, I have included a chart below of GDXJ, the “junior gold mining index. Here we see that GDXJ has bounded above both its 50 and its 200-day moving averages, always a bullish move.
More on gold — This morning (July 14th) August gold climbed as high as 1594.10. Then came a little intra-day correction, taking August gold slightly to the minus side. As I write gold is again on the plus side, up 1.80 to 1587.40. Either way, gold is fluctuating around an all-time record high. But gold is digesting its enormous gains since July 1. August gold has closed higher six of the last eight trading sessions. Time for a rest?
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Gold Market Update
by Clive Maund
On Wednesday gold broke out from a 10-week long box or rectangular consolidation pattern to commence its next major upleg. Fundamentally this coincided with noises emanating from the US to the effect that it is recognized that there is no alternative but to continue with QE. Denials later in the day caused the broad stockmarket to lose much of its gains, but the fact is that there is no alternative to QE, except a global systemic economic implosion, and thus, there is no alternative to QE, although attempts may be made to disguise the extent of it.
On our 6-month chart we can see gold’s breakout and how, after 7 days of gains, it is starting to become overbought. However, apart from brief pauses to partially unwind the overbought condition, it is expected to continue to advance strongly in coming weeks and months, overbought or not, and this positive outlook is reinforced by the strongly bullish picture for silver and Precious Metals stocks.
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