The Gold Price May Not Be Rising in a Straight Line

The 70's are back! Is that what is being quoted in the Financial Press this week?

Well maybe the chart patterns for the gold price of the 70's are back too. I think they are.

Notice this is a logarithmic scale for the gold price and the silver price, and the trend line is not linear, that means a straight edge will not give you accurate support line for the price of gold or silver. This is important for investors and traders to consider because they need to know where to put new capital back to work on pull backs.


Jim Sinclair (bio) was the largest gold trader in the world in the 70's so I asked him what tool do we use when the straight edge no longer works. He suggested that I try a French Curve. Was I ever surprised, what a fit.


The French Curve shows a momentum change. If you need another example of how the momentum changed for gold in the past, just look at the 70's chart for the gold price. Good luck with your new technical tools you may need it with the gold and the gold shares in the future.


The affect of the gold price rising with momentum in this fashion can have a significant affect on the gold miners. Barrick Gold produced great numbers last quarter with rising margins.


Click the Image for Barrick Gold's Full Q1 2008 Presentation









I am considering shortening my time frame for dollar cost averaging into Gold and Silver.

Don't let the Gold and Silver Price Take You Out

Jesse Livermore said there were three key elements to success in a bull market, Timing, Money Management and Emotional Control.

Look closely at the silver price chart to the left, now without being emotionally involved visualize where the best places would be to buy silver over the past 7 years. Is it a the peaks where you feel most excited? NO, Is it a month after the silver price had a sharp sell off? YES

Now ask yourself is the BULL market over? if Yes, take your money and run , and DONT LOOK BACK. If However you feel we are entering into a highly inflationary time where all global currencies are FIAT and we have years left in the Bull Market to go, you are entering an ideal time to Buy Silver and Gold.

I have studied Jim Rogers, and Jim Sinclair for hours, they have done all dirty work on the fundamentals and their thesis is published for you to analyze. Conclusion BULL market in Precious metals are far from over.

What you don't want to do is put yourself in the position where you buy strength and sell weakness.

Jim Sinclair participated in a great interview with Chris Waltzek from Goldseek Radio.

Think carefully about this important message Jim makes.


Jim Sinclair 1:11 approx
http://radio.goldseek.com/

Chris W:
You discussed the dangers of leverage in the precious metals markets while promoting cash investing, I want to give you a chance to talk about why.

JIM S:
"The majority of people couldn't stand what went on in the last month in gold, You know..they would see their life passing in front of their eyes, they would be terrified of their investments ...emotions would take them out where? Directly on the BOTTOM! -- UP it goes in they GO-- Before their finished they got no money so when you speak to many people you have a responsibility and the responsibility is sort of like don't yell fire in the theater. You don't have to have a ton of gold , A little goes a long way, Its an insurance policy."....

"GOLD IS INSURANCE when you start putting leverage on it you are a speculator...go speculate in GOOGLE, leave GOLD alone!"


A very easy and fast way to Buy Gold and Silver Bullion Online.

The Gold Price Correction - Time to Focus on the Upside Now

The GOLD PRICE has NOT topped out, so that means what we are currently experiencing is just a correction. Is the gold price correction over? Hard to tell.

I will give you a check list to consider, that I have looked at for evidence of a bottom forming in the gold price. However this isn't that important to me now, as I am more focused on the upside target since this is only a correction. Don't be so concerned about nailing THE BOTTOM. I am more interested in the next Cherub above $1,033, our previous high.

Conclusion. I am ready to focus on the upside now.

Notes on the HUI (a Gold Stock Index)

Gold Stocks can show signs of a bottom before the actual metal so I look at a group of gold stocks like the HUI index for clues of a bottoming process. Looks like an ABC correction here, with a possibility of 360 on the downside. I used a French curve to expire this correction. I was adding to some of my Gold Growth stocks today since my old fashioned target has always been to add on or near the RSI 30 level. I am almost always early, but, I never have a problem sitting on my buys. I DO NOT USE STOPS.
Check list for bottoming process

• Trendline break .. check (good sign)
  
• RSI 30 ...check (great place to add)
  
• ABC formation in progress... Check (final process of a correction)
  
• French curve... in process (exhaustion move)... check
  

Gold Price Intervention is Normal

The GOLD PRICE broke a recent 1 week trend line, that made the short term traders nail the sell button all at once. The gold price moved nicely and gently down thirty dollars today. I believe this move down will not even show up on a 5 year chart.

Short term speculators that have no notion that there is an anxious intervention going on will pay the price and like Jim Sinclair says "may want to consider getting a cheaper hobby".

I stay with the plan that the intervention will not succeed in the long run and that the 4 week cycle will probably hold. The gold price low so far was put in just after a two week period during this correction.

It is not uncommon for a cycle low in this case the $880 level to be tested once again around the 4 week period but that did not happen today, the low was the $900 level today at the 4 week period . This to me is a bullish sign since it leaves the gold price with a higher low today. It is possible that consolidation could be extended with intervention and prolong the correction. I however will add to my long position in GOLD and my favorite gold shares early next week.

The "GATA Goes to Washington: Anyone Seen Our Gold?" conference in Washington, D.C., is on from Thursday, April 17, to Saturday, April 19, 2008.





GATA says in their full page ad published in The Wall Street Journal on Thursday, January 31, 2008:

"Gold's recent rise to $900 per ounce shows the price suppression scheme is faltering. When it is widely understood how central banks have been suppressing the gold, its price may rise to $3000 to $5000 or more."

Is the $1000 Gold Price Correction Over?

Is the $1,000 Correction over? Conventional technical analysis tells me the correction is over or close to it with the break to the upside of the green down trend line. I also like to look carefully at the peak to bottom cycle period in the gold price which is nearly complete. Historically it has proven to be a 3-4 week cycle form peak to bottom. So now, enter the era of consolidation and the formation of a continuation Pattern, in other words UP AND DOWN sideways action. A retest of $880 or even a final low of $850 is possible on the downside but the more interesting move in my opinion is the $1,250 point on the upside.

In the 4 week period which is coming upon us I will be dollar cost averaging in physical Gold bullion and in an allocation form at Goldmoney.

$1000 Gold Price Hurdle

The Gold Price has successfully touched the $1,000 gold price mark, where profit taking took place. Even though this market is still undervalued the round number $ 1,000 was a place to take a pause. The next step is consolidation, I expect tight consolidation to occur here. A typical up down consolidation. Three attempts at the $ 1,000 gold price and some time should put it behind us.

GOLD PRICE HITS $ 1,000 .. more to come ...