Jon C. Ogg of 24/7 Wallst
Gold has been making a serious comeback and many are talking about the $1,000 per ounce level again as being ahead shortly. This latest run is with energy prices screaming, the US Dollar getting pounded again, and with the fears that all this new money being printed is going to create much higher inflation down the road. When gold was making the same sort of run to $1,000 earlier this year, that was because of the fear premium. The other difference is that in this move, we are now starting to see a technical break-out on the charts of some of the top gold miners that trade in the U.S. that are actually global operations. The Market Vectors Gold Miners ETF (NYSE: GDX) was up 4% at $44.45 in early trading, and its 52-week trading range is $15.83 to $51.84. Two gold stocks are making key break-outs: AngloGold Ashanti Ltd. (NYSE: AU) and Randgold Resources Limited (NASDAQ: GOLD). Other large gold mining leaders are lagging, but you have to wonder how long that will last if the stock market stays strong and if the interest in the re-flation trade stays high.

Barrick Gold Corporation (NYSE: ABX) is the biggest component of the Gold Miners ETF, and it is the farthest off of its 52-week high. Wile shares are up over 3% at $38.45, its 52-week range is $$17.27 to $52.48. Yamana Gold, Inc. (NYSE: AUY) is also lagging. Even with a 3.5% gain to $11.52 today, its 52-week trading range is $3.31 to $17.00. Goldcorp Inc. (NYSE: GG) is another large component in the gold miners ETF, and with a near-3% gain to $39.80 it is still well under its top-range with a 52-week range of $13.84 to $52.65. Even with a 2% gain in Newmont Mining Corp. (NYSE: NEM) to $48.59, its shares are under the highs as its 52-week range is $21.17 to $53.77.

AngloGold Ashanti Ltd. (NYSE: AU) is one of the top components in this ETF and its shares are up over 3% at $42.14; the 52-week trading range WAS $13.37 to $40.98.

Randgold Resources Limited (NASDAQ:GOLD) is trading up 2.5% at $71.65; its 52-week trading range is $22.28 to $70.46.

Royal Gold, Inc. (NASDAQ: RGLD) is more of a royalty company, but it has very much of a cult following. This is trading up 1.3% at $46.45 this morning and its 52-week range is $22.75 to $49.81.

Whether this run is justified or whether it has run too much is one thing. But if it lasts, we’d be looking for some of the leaders in the sector with underperforming stocks to play the big catch-up game in the sector.

The Latest Market Club “Trade Triangles” Here

Be sure to enter your favorite Gold miner symbol below for a FREE analysis

by Chris Vermeulen www.GoldAndOilGuy.com.

Gold stocks have been performing well but I cannot help but notice that the gold sector has reached a major resistance levels on the monthly chart. As much as I would like gold stocks to continue higher we must be ready for a pullback.

I have moved my stops higher to lock in profits from the recent rally in price. If the price breaks down from here I will be sitting in cash having made a decent profit, and I waiting for the next low risk entry point buy or short gold.

Gold Bugs Index – Monthly Chart

You can see clearly that we are at a resistance level in the monthly time frame. Two things happen at resistance levels. The price eventually breaks though and surges higher or eventually drops like a rock. This is the reason why I am pointing this out. I want everyone to be ready for a quick movement. Either to watch your longs increase in value or to lock in profits if the price breaks down from here. The daily chart helps more with entry and exit points but it’s important to remember that the monthly chart is at resistance which holds a lot of power.

Gold Bugs Daily Chart – Gold Stocks

Gold stocks have been channeling for several months and last week they broke to the upside. As you can see from the chart below the index opened down at the support trend line and rallied to close much higher on Wednesday.

This is a bullish candle but not the type of candle I wanted to see. What I like to see on a bounce off support is a close above the previous days high. This signals there is power behind the move. Today’s price action was good but not the best. We want to see sideways or upward movement within a couple days for this trend to continue higher.

The US Dollar

The US dollar chart looks like a roller coaster over the past 9 months. Currencies now move and trade like stocks/commodities, its crazy.

This chart shows a solid head and shoulder pattern indicating prices could drop as low as 76 within the next couple months. The head & shoulders pattern has proved to be very accurate especially with currencies. We will most likely see some type of bounce at this current level but overall the trend is down.

The falling dollar will help boost the price of gold in US dollars which could give gold and gold stocks that nudge through the current resistance levels.

Active Trading Conclusion:

Gold and gold stocks have been moving higher and many of us are long positions surrounding this commodity. I can feel the pressure building in the market with fear of inflation, and the overall economy. Something is going to happen quickly here with gold and the US dollar.

Remember to raise and place your exit orders to lock in current profits on any type of pullback/breakdown.

If you would like to receive my Free Weekly Trading Reports or Trading Signals please visit my website at: by Chris Vermeulen www.GoldAndOilGuy.com.

Be sure to put in your favorite gold miner below for a FREE analysis

August Gold closed higher on Thursday as it renewed this month’s rally. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If August extends the rally off April’s low, the reaction high crossing at 971.00 is the next upside target. Closes below the 20-day moving average crossing at 927.40 would confirm that a short-term top has been posted. First resistance is today’s high crossing at 966.70. Second resistance is the reaction high crossing at 971.00. First support is the 10-day moving average crossing at 944.10. Second support is the 20-day moving average crossing at 927.40.

Tom Lydon of ETF Trends
Fears about the economy have been slowly abating, yet gold exchange traded funds (ETFs) and the metal itself haven’t shown many signs of waning interest. What’s happening here?

Many analysts say that the precious metal is expected to keep trading above the $900 per ounce mark, and the prospects for the $1,000 mark are good, as inflation fears are mounting. An anemic U.S. dollar and global economic stimulus has the possibility for inflation higher than usual.

Allen Sykora for The Wall Street Journal reports that stocks are up from their previous lows and the banking sector fears are not as pronounced, so inflation has replaced market fear as the main concern for investors at this point.

If inflation rates rise as much as some analysts expect, gold is one market whose prices are likely to go up in line with inflation rates. China has been stocking up on gold bars, and overall investor demand is up. In the first quarter of 2009, these fears drove total demand 38% higher from a year ago, according to figures from the World Gold Council.

Silver has shared some of the spotlight with gold, outpacing its 2009 highs already. According to analysts, gold could outperform other markets if the perceived inflation threat becomes a reality.

May gold futures on Friday rose $7.70, or 0.8%, to $958.50 an ounce on the Comex division of the New York Mercantile Exchange, up 8.5% for 2009.

Be sure to have a strategy in place when you decide to enter into the market, or have an exit strategy ready if you are already invested. At ETF Trends, we follow the 200-day moving average.

• SPDR Gold Shares (GLD): up 8% year-to-date
  

• PowerShares DB Gold (DGL): up 7% year-to-date

Jim Sinclair is the doyen of gold experts. It is interesting to see a very clear timeframe for the gold price posted on his website yesterday:

1. Gold reacts as currency support for the dollar enters mid June to a slow decline (that is the official definition of a strong dollar policy, really).
2. End of 2nd week going into the beginning of the 3rd week of June Gold launches towards and this time through the neckline of the reverse head and shoulders formation.
3. Gold rises to $1224 where it hesitates.
4. The OTC derivative market takes on the dollar as short sellers into dollar support.
5. This OTC derivative currency short position builds.
6. t is the US dollar where Armstrong will get his WATERFALL.
7. The main selling takes place when Israel makes a major miscalculation.
8. Hyperinflation is always and will continue to be a currency event.
9. Hyperinflation will be a product of the upcoming massive OTC derivative short dollar raid.

“Should I be correct in the gold price action going into late June, it will fit Armstrong’s criterion for a move to $5,000″, adds Mr. Sinclair whose predictions are not always right, and who got similarly carried away last summer.

Free Gold Analysis Here

Chart Courtesy of Jim Willie CB

Gold has been a big winner this month with a move over the $950 level. This stellar move produced profits over $2,845 a contract. This represents a return of 50% in less than a month over initial margin*.

If you’re not familiar with Market Club’s “Trade Triangle” technology, I highly recommend you take a look at it and see how it works in spotting the big moves before they begin. Click The Chart Below To Start The Video

August gold closed lower due to profit taking on Wednesday as it consolidated some of this month’s rally. A late-session rally tempered early losses and the mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If August extends the rally off April’s low, the reaction high crossing at 971.00 is the next upside target. Closes below the 20-day moving average crossing at 924.40 would temper the near-term bullish outlook. First resistance is last Friday’s high crossing at 964.60. Second resistance is the reaction high crossing at 991.00. First support is the 10-day moving average crossing at 940.50. Second support is the 20-day moving average crossing at 924.40.

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July silver closed higher on Wednesday as it extends the rally above the 50% retracement level of last summer’s decline crossing at 14.355. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 13.841 are needed to confirm that a short-term top has been posted. If July extends this spring’s rally, the 62% retracement level crossing at 15.662 is the next upside target. First resistance is today’s high crossing at 15.020. Second resistance is the 62% retracement level crossing at 15.662. First support is the 10-day moving average crossing at 14.288. Second support is the 20-day moving average crossing at 13.841.

July copper closed lower due to profit taking on Wednesday while extending this spring’s symmetrical triangle. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are turning bullish hinting that sideways to higher prices are possible near-term. Closes above the reaction high crossing at 221.70 are needed to renew the rally off the late-April low. First resistance is today’s high crossing at 215.90. Second resistance is the reaction high crossing at 221.70. First support is the reaction low crossing at 196.70. Second support is the reaction low crossing at 190.05.

(Bloomberg) — Gold may target a record $1,250 an ounce as a continuation head-and-shoulders pattern may be forming within a longer-term trend, Standard Bank Group Ltd. said, citing trading patterns.

A break and close above $1,050.40 “provides warning that an important breakout” has occurred, Darran Grabham, the bank’s technical analyst, wrote in a note yesterday. A head-and- shoulders pattern is formed when a commodity makes three consecutive peaks, with the middle being the highest. It forms during a series of increases over time.

“The positive implications are substantial, with the minimum objective situated at $1,250,” Grabham wrote. “On the downside, gold weakness through $864 turns the outlook bearish, and the weaker trend could then continue towards $802.”

Gold for immediate delivery traded little changed at $957.29 an ounce at 8:09 a.m. Singapore time. The precious metal is down 7.4 percent from its record high of $1,032.70 on March 17, 2008.

In the near term, a negative bias is expected to dominate in the days ahead as the positive trend has faltered in the $960 to $966.70 area, Grabham wrote.

“A decline into the $940 to $935 zone is anticipated, with $935 regarded as an important support point over the next week or so,” he wrote. “We expect gold to enter a period of consolidation below $966.70, before a break higher occurs, setting up a test on $980.” So-called support levels are where buy orders are clustered.

“If $935 gives way — delaying the next move higher — the sell-off could continue to $925, with $915 representing another key near-term support level,” Grabham added. “Weakness through $915 negates the positive outlook, exposing the market to the $895 to $885 area.” Free Gold Analysis

IT GETS dug out of the ground in Africa, or some place. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it

IT GETS dug out of the ground in Africa, or some place. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head. Warren Buffett. The bedrock case for gold:

THE basic premise is not new, but then nothing’s changed much… Ludwig von Mises, the father of Austrian economics, who recognized early on that government attempts to massage the credit cycle always end in tears, memorably described the phenomenon as follows: “There is no means of avoiding the final collapse of a boom expansion brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”…….

……But who’s going to buy when it comes time to sell?

SPDR Gold Trust (GLD), the gold ETF, is the sixth-largest holder of gold in the world — ahead of China. However, it does not determine its purchases and sales of physical gold. When investors buy GLD it has to buy gold, driving up the price, which raises a question: who will be buying gold from GLD when investors decide to sell?

Gold is one of those weird assets that doesn’t have an intrinsic value. You can’t run a discounted cash flow on it. It has no cash flows. It is an asset where perception and reality are deeply intertwined. A violent sell-off in GLD would drive the price of gold down dramatically. No longer perceived as a store of value, the gold game will quickly be over. From an article by Vitality Katsenelson at contrarianedge.com Story at Businessday