The past 7 days we have seen both the US Dollar and Gold rise together which is not something that happens often. With financial crisis’s popping up around the world I think the US dollar and gold will continue to strengthen (with corrections along the way). I think it will take another 12-24 months before another wave if issues arise in the financial markets and until then we just continue to focus mainly on buying the dips and corrections with the occasional short play in the larger corrections.

USD, Gold And SP500 – Daily Performance Chart

If you would like to receive my ETF & Futures Trading Signals check out my website: www.TheTechnicalTraders.com

Chris Vermeulen

By Jordan Roy-Byrne, CMT of The Daily Gold

Since early 2009 we’ve written about the super-bullish long-term cup and handle pattern in Gold. It dates back to 1980 and has a logarithmic target of about $2,100. We noted that previous cup and handle patterns in Gold all reached their logarithmic target¹. We expect that this move to $2,100 will be the recognition move that awakens the masses to the Gold bull market and the reality of severe inflation in the near future.

Speaking of the near future, the relative strength of Gold in the face of a strong US dollar (or weak Euro) is one big hint that this recognition move is around the corner. We’ve noted this before and it is important to explain to new readers. Gold priced in foreign currencies has been leading Gold in US$ terms. It is true for the entire bull market and is quite evident in just the past few years.

In the chart below we use the foreign currency ETF (UDN) to show Gold against currencies ex the US Dollar. The lower half shows Gold in US Dollars. Note how Gold/UDN is breaking away to new highs. That chart is so strong that it barely had time for even a small correction. Since Gold/UDN has been leading Gold reliably, this is an indication of what is eventually coming in the US Dollar price of Gold.

Nowhere Close to a Bubble

As Gold pierces $1200 and makes a new high, surely we will hear a new round of calls that Gold is in a bubble or it is a crowded trade. Be sure to avoid this unsubstantiated nonsense, as it will only serve to waste your time and inevitably reduce your net worth. Let me provide you with just a few pieces of information, which refute this baseless claim.

First, did you know that as of a few months ago, Gold equities and ETF’s only accounted for 0.7% of all managed assets in the world³! Can you imagine how high precious metals could rise, if everyone in the world just put 2% of their assets in this sector? What if it was 5% or 10%?

Second, Jim Rogers recently spoke at a conference with, in his words, 300 big-time money managers. Apparently 76% of them had never owned Gold!

Third, superstar fund manager John Paulson of subprime fame has had great difficulty raising money for his Gold fund⁴. Even one of the top fund managers can’t even convince people to get aboard the Gold train.

Finally, consider public opinion on Gold, courtesy of sentimentrader.com. In the past, public opinion followed Gold higher. Yet, since the end of 2008, public opinion has stayed in a range, while Gold has climbed about $300/oz. The public hasn’t budged despite the historic breakout and holding of $1000/oz level.

Policy Makers are Shooting Blanks

Mainstream and amateur analysts will make the claims that the Fed will tighten or that the government will get serious about its troubling finances. There is almost nothing the authorities can do to stop the coming inflation and the roaring bull market in Gold and Silver.

First and most importantly, because of the overall debt level, which is massive compared to 1980, the US cannot afford to let interest rates rise. If interest rates rise, the market will only lose greater and greater confidence in the US as the interest burden will accelerate thereby hurting the economy’s ability to grow and hastening the threat of bankruptcy. However, if interest rates remain low, speculation in hard assets will become rampant as these markets continue to rise, inflation ticks up and purchasing power declines.

Second, the Fed would have difficulty trying to tighten the money supply. Remember that to do this, the Fed would need to sell assets into the market. Remember, the Fed’s balance sheet consists of garbage assets that the Fed overpaid for. Yes they could raise interest rates but then how would the banks survive? They wouldn’t be able to borrow at 0.25% and repair their balance sheets. If the Fed would raise rates above the level of inflation, it would certainly end up threatening the financial system.

Moreover, as we’ve noted again and again, severe inflation results from a loss of confidence in a government’s ability to meet its debts. This manifests in a falling bond market, rising interest rates and currency weakness. Debt crisis’ go hand in hand with currency crises. Hence, we see Gold breaking out against numerous currencies even though “the banks aren’t lending” and “velocity is falling.”

The last line of defense is the Treasury market. If and when interest rates breakout to the upside, the authorities will effectively lose both control and power. At that point, the inflation genie will be out of the bottle. The action in Gold is already hinting at that outcome.

Conclusion

Even though Gold has risen nine years in a row, it is nowhere near a bubble. Just take a look at this chart courtesy of Frank Holmes. It compares Gold’s current bull market with its bull market in the 1970s.

Note that Gold rose about six-fold the first eight years into the bull market (it began in 1970). Ultimately it rose 25-fold. The Nasdaq from 1982 to 1992 advanced about four fold. Ultimately it rose 29-fold. The Nikkei advanced less than three fold from 1970 to 1978. From 1970 to 1990 it gained 19-fold. Gold is nine years into its bull market and has advanced less than five fold. See a pattern here?

If you’d like professional assistance riding the coming acceleration and eventual mania in the Gold and Silver market, then visit our website and consider a free 14-day trial to our premium newsletter.

Jordan Roy-Byrne, CMT

Jordan@TheDailyGold.com

SK Options Trading

On the 8^th of December 2009, we wrote an article exposing what we thought was an excellent opportunity for option traders. Gold was correcting from its end of year rally to $1225 and many believed that the yellow metal was heading back to three figures. However we disagreed and suggested a risky but potentially more highly profitable trade for those who also believed that gold prices were not going to drop below $1000. In this article we wrote, “We think that any put contracts expiring in the next few months, with strike prices below $1000/ounce of gold (or equivalent for GLD) are worthless. Therefore we think their prices will soon fall to reflect this, and so we are of the opinion that selling these puts is a good trade, with the plan being to purchase them back for mere cents as they approach expiration.”

“With gold enjoying strong support at about $1020-$1033 and GLD getting a great deal of support at around $100, selling out of the money Jan-10/Feb-10/Mar-10 puts on GLD with strike prices of roughly $95 appears to be a good idea to us, we would view the sale of those contracts as money in the bank”.

We suggested that investors who also believed gold was not going to fall below $1000, to short sell the $95.00 GLD Puts series (or equivalent gold option contracts), selling Jan-10 contracts trading at $0.32, Feb-10 at $0.76 and March-10 at $1.26.

Out of those contracts we suggested to short sell, ALL expired out of the money, meaning that they all ended up being worthless. So investors who short sold these puts could’ve have bought them back for as little as 1 cent on the day of expiration. Shorting contracts at $0.32, $0.76 and $1.26 and then buying back at $0.01, or even $0.05 is a very profitable trade, offering a significantly reward that we believed significantly outweighed the high risk of the trade.

This trade contains a higher level of risks than most trades we recommend in OPTIONTRADER. An example of a typical trade can be found here

Looking at gold going forward we are very bullish, since gold is making higher highs and higher lows and has a fairly clear path to $1200 again.

The situation that threatened to cast a shadow over the gold rally appears to be calming. We refer of course to the PIIGS, in particular the troubles in Greece, which were causing the EURO to slide and subsequently a rally in the USD, placing downward pressure on gold since it is priced in US dollars. We saw a relatively strong auction for Greek bonds last week and with more talk of bailout backing from the EU and IMF, it appears the situation is easing.. for now.

Given these factors and the conclusion that gold prices are heading higher, the question is how to best play the next move up in gold. Some like holding the physical metal, some the mining or exploration stocks, however we prefer options. Their versatility and adaptability means that any investor can take advantage of them and can tailor the risk in a trade to suit ones aversion to such risk, and by effectively managing the risk against the potential reward in the trade, we aim to optimize the risk/reward ratio for our subscribers and clients.

by Tyler Durden

Did the LBMA Au plunge enforcement team all take a bathroom break at the same time? The catalyst – dollar dumping accelerates as euro surges on German Finance Minister’s latest words (not to be confused with his words from an hour ago which contradicted the latest batch), who said that Germany is ready to make it’s contribution to the Greek aid facility. A few hundred parliamentarians may beg to differ. The Euro has surged from 1.3290 to 1.3360 in a manner of minutes. Session highs at 1.3375 may be taken out. We feel so sorry for all FX traders who are still alive ever since the Greek episode began. The main observation: gold no longer goes down when USD surges, but surges when dollar dumps.

Here at Casey Research, we eagerly awaited the release of quarterly reports from the companies in our favorite sector. Why? The gold price was substantially higher last quarter than during the comparable meltdown quarter of 2008, so we were anxious to find out if it would lead to a spike in profits.

Gold and silver producers posted substantially higher net profits, and yes, much of it due to higher metals prices. But amazing to many, higher profits did not lead to higher – or at least not significantly higher – stock prices.

While most saw their stocks rise the day of their respective announcements, some actually fell if gold or the broader markets were down on the day. And they certainly didn’t jump like you might expect when “soaring profits” splashed the headlines of their press releases.

What gives?

We have some answers straight ahead, including a big fat clue as to when gold stocks will take off and give us those “magical” price levels we think are coming.

Gold Stocks Are Still Going to Take Off, Right?

We think that at some point the public is destined to participate in precious metals stocks, and when they do, we’ll see volumes jump and share prices take off.

But for now, gold stocks are playing follow the leader…

… rising and declining in tandem with the S&P since last April. So, until gold stocks separate from the overall market, we should anticipate they’ll tag along if the markets slide. And we think the path of least resistance for the stock market is down, not up, so caution is warranted about going overweight our stocks.

But just as we showed with gold last month, gold stocks will similarly propel higher when the general public crowds in, regardless of what the markets are doing. Here’s what gold stocks did in the last great bull market, compared to the S&P.

As measured by the Barron’s Gold Mining Index (a good substitute for the HUI that didn’t exist), gold stocks rose 652% during the 1970s (through January 1980), while the S&P returned a wimpy 22%. The action in the ‘70s was definitely in gold and gold stocks, despite two recessions that decade, and we think a repeat is in the cards.

When the masses finally wake up, it’s highly probable our returns will match the chart above or the late ‘90s surge in Internet stocks.

Is Now a Good Time to Buy?

As investors, our goal is to get positioned in the best stocks at the best price. And buying low assures us of more profit when we eventually sell. So, are gold stocks “low” right now?

We have a couple clues to help answer that, with gold itself offering the most important hint. Let’s compare how gold stocks are performing in relation to gold to see if they’re overvalued or undervalued or somewhere in between.

The chart shows that gold stocks, as measured by the HUI Gold Bugs Index, outperformed gold until 2008. Since then, gold stocks have underperformed gold by a fairly wide margin.

This gold-stock-to-gold ratio tells us that in our bull market, gold stocks are currently undervalued relative to the gold price. This doesn’t mean they can’t get cheaper, of course, but it does signal they represent good value and that compared to their underlying asset, there’s lots of room to the upside.

So, if you have a long-term perspective and the patience to wait until gold stocks begin outperforming gold again, today’s prices are good prices.

So, do we buy? The answer depends on your current exposure to gold stocks, how much gold and cash you have, and your outlook. If you own equities exceeding one-third of your total investable assets, we wouldn’t rush to buy. If you have limited (or no) exposure and a patient mindset to see you through until the big payday, even enduring temporarily lower prices along the way, then buying some now is probably a good move. If you have very little in the way of savings and gold, we’d put money there first before committing a big chunk to gold stocks.

Basically, the larger your stable of gold stocks, the more stubborn you should be about price. And we wouldn’t go “all in” just yet. Your risk in loading up now is if markets were to take another nosedive. But if you’re light on stocks, adding some of the best of the best at this time should work out well, as long as you don’t panic into selling on general market weakness.

Just Tell Me When!

The #1 indicator that will tell us when gold stocks will take off has nothing to do with charts and is something you can monitor yourself: it will be when your neighbors and co-workers begin to express curiosity. You obviously want to be invested before them, but that’s when things will start to get exciting.

So when might “gold fever” strike your neighbor? History holds the best clue:

►In the 1970’s bull market, gold stocks began their big ascent when the gold price hit about $450/ounce. Adjusted for inflation, that would equal roughly $1,340 today. So, when we see gold rise decisively above $1,300 and stay there, that just might be the trigger that spurs the interest of the masses in gold stocks. That’s not a prediction, but it does give us an idea of what to look for.

Casey Research chief economist Bud Conrad was right when he called for gold breaking through the $1,150 barrier in 2009 – and now he’s calling for gold to break over $1,450 by year’s end. Weighing in as well, Doug Casey himself sees precious metals as the only asset class worth buying now, and gold stocks as being the best way to add speculative leverage to those investments.

Exciting? You bet. We’re convinced that, sooner or later, higher prices are ahead for the best gold- and silver-producing companies, along with the “magical” levels that can happen in a mania. So, while we encourage caution, we also encourage selective participation so you don’t get left behind. Waiting for the “perfect” time to buy is an exercise in self-deception; nobody can time the market.

Let’s be honest: no one can guarantee when or if a gold mania will happen. But all of our research points to higher prices for gold (and silver), so we remain confident we’re in the right sector. And we can make money before the mania gets here.

To learn where to buy physical gold and where to store it… and which major gold stocks, mutual funds, and ETFs are the safest while giving you handsome upside… read Casey’s Gold & Resource Report. At $39 per year, it’s a steal for the value you get out of it. Click here for more.

In this new (brief) video, I show you how this market is setting itself up for a large move to the upside. I’ll also point out that I don’t think this is going to happen tomorrow. The video is about two minutes long and I think it will give you a great insight into the past and future of this particular market.

Click The Chart Below To View The Video

By Jordan Roy-Byrne, CMT

In recent commentaries, we’ve focused on the macro factors that will drive acceleration in the precious metals sector. Namely, the gradual exodus from both government and corporate bonds as authorities are forced to monetize debts in an effort to avoid rising interest rates, which would hasten default and bankruptcy. This, and not bank lending or consumer demand, is the cause of severe inflation.

Predicting the timing is more difficult then the actual event. Luckily for our subscribers we constantly pour over numerous technical charts and sentiment indicators in order to advise as to favorable entry and exit points. In analyzing Gold, we find that intermarket analysis is an essential tool. Intermarket analysis is analyzing a market by comparing it to other markets.

For Gold, the first study is a comparison with the S&P 500. In this chart I show Gold next to the Gold/S&P 500 ratio.

Every large or impulsive advance in Gold was accompanied by a similarly large move in the Gold/S&P 500 ratio. Currently, the short-term trend for Gold is higher but the trend for Gold/S&P 500 is lower. Simply put, before Gold can embark on an impulsive move, investors will need to favor Gold over stocks. Gold can only rise so much if money is moving into stocks at the same time.

Another important and obvious example is the US Dollar. In the chart we show Gold plotted next to the inverse of the US Dollar.

Gold can rise at the same time as the US$. We all should know that by now. Also, Gold can perform very well even if the US$ is flat. However, the point here is that as long as the US dollar is rising, it will be difficult for Gold to embark on its next impulsive advance.

Relatively speaking, Gold is performing well against other markets like commodities, various currencies and treasury bonds. However, it is clear that the yellow metal will need to regain its footing against stocks and the US currency will need to peak or pause for months before we can expect Gold to make an impulsive advance to $1500 and beyond.

In our premium service, we dedicate ourselves to analyzing technical and sentiment factors so that we can keep our subscribers ahead of market developments. Moreover, we combine technicals and fundamentals to help traders and investors find and stay in the best junior companies. Consider a free 14-day trial to our premium service.

Jordan Roy-Byrne, CMT

http://www.thedailygold.com/newsletter

Jordan@TheDailyGold.com

Gold Scents

I’ll start off with an analogy.

Let’s say you just bought a business, a small restaurant. You open for business on Monday and after a week you have grossed $6000. You’re feeling pretty good about how things are going. The business is up and running. Dollar signs are floating in your brain.

Then a week later you get bills for your first food order, payroll & rent. Maybe you also have the misfortune to get hit with the gas and electric bills on top of that. By the time you finish writing checks your +$6000 has turned into -$3000.

Now let me ask you this. Would you immediately throw up your hands, lock the doors and walk away?

I dare say most of us would stick it out a little longer than a week. I would hope that most of us have enough common sense to realize that sometimes we have to persevere to get the reward. And after all, a business we researched so carefully before we started it should surely be given more than a week’s chance to succeed.

However, most gold investors do exactly that, they walk away from their “business” after the first minor setback – even if they logically understand there is no fundamental reason to lock the doors.

This is what traders do when they stop out of gold positions. Let’s face it, the bull isn’t even close to being over yet. By stopping out of a position you are just turning a winning trade into a loser because you didn’t have enough patience to wait for the secular trend to correct a timing mistake.

To put it bluntly, the only way to lose money in a secular bull market is by trading.

Now in my opinion, the difference between a strong investor, one who is not easily knocked out of their position, and a weak one, has nothing to do with how deep ones pockets are. Nor does it have anything to do with how much trading experience one has. And it certainly doesn’t matter what one uses to give themselves an edge, whether it be technical analysis, fundamentals, patterns or chicken gizzards.

I can tell you this: everyone, when they enter a position, starts out as a weak hand.

An investor has to graduate to strong hand status. That, my friends, can only be earned with patience. Let me show you what I mean.

Let’s say you bought mining stocks back in early November 2008. Now it’s April 2010 and your positions are up almost 100%. You are now so far into the green that virtually no correction is going to be able to knock you out of your position. You have basically zero chance of those positions ever losing money for the remainder of the bull market. You’ve become a strong hand.

However, when you entered that position you would have immediately suffered a drawdown as the miners quickly tested the lows in December, and unless you had the conviction to hold on to your trade, you would have gotten knocked out right away for a loss. Look what you would have missed.

It’s very rare that an investor will graduate to strong hand status quickly. The market rarely moves that fast and that far in one direction.

90% of the time the only way you are going to move into the strong hand category is with patience. You are just going to have to let your position work long enough to put a lot of green between you and your entry. Eventually though, you will reach a point where you can weather almost any correction unaffected.

Now here’s the problem with trading. You almost never make it into the strong hand category.

An investor who tries to get “cute” and time short term swings with his investments has the same problem. As soon as you sell you immediately become a weak hand again.

Let me describe what happens to most traders, novice and professional alike.

Let’s say you take a position and you time it pretty well so that the trade goes your way immediately. You’re making money and now you’re feeling pretty good about yourself.

The problem then comes if you don’t have a clear cut exit strategy. If you hold too long the market will almost always pull back enough to take your trade back into the red at some point. When that happens, most traders freak out and sell for a loss, often needlessly.

Or, how about this? You enter a trade but you don’t time it well. You enter at a short term top. The market goes against you immediately; you freak out, sell for a loss, and proceed to curse the trading gods.

Of course if you would only hold tight, the reason you took the trade in the first place will usually turn the trade back in your favor. That is certainly true if you buy in the precious metals sector as the secular bull will eventually correct any timing mistakes. Of course if you panicked and stopped out then you will be long gone when the trend resumes. The market already took your money. “Thanks for playing, come back soon”.

In the last scenario (entering at a short term top) you will probably have two periods where the market takes you back into the red. How many of you can hold through that kind of torture?

Short sellers are in the same position. Selling short, just by its very nature, is going to be pretty tough to achieve strong hand status. Let’s face it, there is no way to get 200-300% in the green like you can on the long side. Plus, bear market rallies are violent affairs that can evaporate a profitable short position in a matter of days if not minutes.

Let me stress again that the only way to lose money in a secular bull market is by trading. As long as you are patient and willing to let investments work, it’s next to impossible to take a loss buying a secular bull market.

Now as long as you aren’t leveraged it just doesn’t make a lot of sense to stop out of a winning position simply because it didn’t do what you wanted it to do in the time you wanted it to do it in.

I suspect a great many gold investors panicked and sold positions during the recent January/February correction. At the same time I suspect every one of those traders realized that the gold bull was far from over!

So why sell? As long as the bull is still intact the only reason to take a loss on precious metal positions would be if you believe an alternative trade would make you money rather than just weathering the drawdown while you wait for the secular trend to resume.

The problem is that for about 90% of retail investors (I’m probably being generous), trading isn’t going to be profitable in the long run. By stopping out you are needlessly turning a winning position into a loss because you didn’t have enough patience to let the position work.

Traders will say that they traded a small loss for the opportunity to make a winning trade. But they also traded a loss for the opportunity to make another loss, thus compounding the problem (which is what happens to most retail traders).

If you had just been patient the bull would have eventually turned your positions green. If you are patient enough those positions will end up being huge winners as the secular bull progresses.

Think about this before you put stops on volatile mining positions. That stop is the only guaranteed way to lose money in a secular bull market. Well, barring an individual company bankruptcy – a problem that can be avoided with ETF’s or ETF like baskets of mining stocks.

What next?

Gold and the dollar are now moving into critical periods. Gold is correcting into a daily cycle low that should bottom in the next week or two.

Whether gold drops below $1085 or not should tell us whether gold is still in an A-wave advance or if the A-wave is coming to an end and a B-wave decline is about to start.

Chris Vermeulen

Last week was exciting with broad market and gold forming an intraday reversal pattern after a long overbought rally, then broke down though short term key support levels. While this move lower was tough on the pocket book for those who chased the market up the past few days and/or were not moving their protective stops up, this move is good for the health of the market.

This pullback is actually a good thing for us active traders who wait for low risk setups and don’t chase prices higher, but rather buy on the dips in a bull market when most of the risk has been flushed out already. Trading with low risk setups is not the most exciting type of trading because there are not a ton of setups but if one can be patient and wait for these plays it is a very profitable strategy in the long run.

GLD – Gold Trading ETF

The chart below is an updated chart which I have showed several times. It shows how gold corrected, bottomed and is now trending back up. This week I will be watched closely to be sure we take a position which has the highest probability of working in our favor if and when a low risk setup occurs.

SLV – Silver Trading ETF

Silver really took a hit on Friday. It is now trading near support but there is not much we can do until we see what happens on Monday. There could be a bounce or more down side, tough to call right now…. And it’s not something you want to be on the wrong side of.

Gold Stocks – Gold Stock Trading

Gold stocks did not drop as much as I thought they would which indicates the market is still very bullish on gold. There is still potential for more downside… so I am letting the market unfold before doing anything.

The “Golden Trading Vehicle” that
has nearly 100% accuracy – Click Here

Gold has had some dramatic moves in the last eighteen months and we expect it will have some equally dramatic moves in the future, but not right now.

While I recognize that gold is one of the few commodity markets that people are really passionate about; the purpose of this article is not to take sides either with the gold bugs or those who reject the argument that gold is forever. Rather, I want to discuss my interpretation of the markets cycle.

After spot gold made an all-time high against the dollar on December 2 at $1,226.37, gold has been in retreat mode. For the for the past several months gold has been in a broad trading range, seemingly unable to move one way or another. This process has created frustration from bulls and bears alike.

Here is the dirty little secret about the gold market. It can be a horrible investment and here’s why:

Gold first started trading in the 80s while I was on the floor of the Chicago Mercantile Exchange in Chicago as a member of the International Monetary Market, (IMM) which was at that time a division of the CME now the CME Group. When gold opened up the public clamored to buy into the gold futures market and guess who sold it to them? Thats right it was the pros- the guys who made their living trading. As a result, gold hit an all-time high of around $850 an ounce back then and it took almost 25 years for gold to move over that level, at least in dollar terms. I dont know what your timeline is, but 25 to 30 years is an awful long time to get even again.

So what is really happening in this market?

Everyone is aware of the problems in Europe with Greece, Portugal and a host of yet to be named countries. We all know that the huge amount of money being printed, coupled with the bank failures abroad contribute to the dollars declining value. These events, in conjunction with the American governments actions, also contribute to the devaluation of the dollar. The government claims that this is beneficial to exports, but the bottom line is that the purchasing power of the American dollar continues to erode in world markets.

Based on the declining value of world currency against gold you might ask- why isnt gold trading at $2,000 or even $3,000 an ounce? What is wrong with this market? This is because a great deal of what goes into the gold market is psychological and reacts to cyclic trends driven by both psychological and economic factors.

So what does all this have to do with the price of gold now? It has everything to do with gold and nothing to do with gold.

Here is what I’ve been able to observe in the last several years in gold and seems to be holding true. It is something that you should pay attention to if you’re interested in the next big move in the gold market.

Before gold can move higher it needs to create what I call an “energy field”. The most recent energy fields in gold were between May 12, 2006 and September 20, 2007. This 17 month energy field saw gold prices oscillate between a broad trading range bound by $730.08 (upside) and $541.80 (downside). That energy field produced enough power to propel gold to the new high of $1,012.40 on March 17, 2008. This marked the first time gold exceeded, in dollar terms, the highs set in the early 80s mentioned earlier.

The energy fields I have observed for gold are taking somewhere between 17 and 18 months to complete. If the energy field holds, then the December 3rd 2009 high of $1,226.37 should remain in place for quite some time. If the same cycle remains true then the recent lows that we witnessed, at $1,050, should also remain intact as they represent the 15 to 16 month cycle low.

With the lows in place the next question becomes when is the next cyclical high in gold? Based on the existing cycle, we can expect the next major gold high in 2011.

To summarize: I expect gold to be locked in a broad trading range for the next 12 months bounded by the December 09 highs of 1,226.37 and the lows of $1,050.00. If the gold cycle holds true, we expect that gold tops the $1,226.37 marker by April or May of 2011.

On the on the upside we will also be looking for gold to make a nature cyclic high in October or November of 2011. It’s impossible to predict the future with any degree of accuracy; however when we look at the cycles in gold this reads as a pretty good bet.

No matter what happens we expect gold will offer some great trading opportunities that investors and traders should be able to take advantage of.

Click The Chart To View The Video