Stunning Gold Chart - Gold on the Cusp of a Strong Rally?

Posted by Graham Parlane on 13 November 2012

All

For a very long time Gold has been considered a commodity, however since the GFC and the massive money printing conducted by the world’s central banks, the modern view is to consider Gold as money i.e. that classic store of value when everything around it is being debased. To whit Gold has been rising steadily as Copper (the Dr with the PHD in Industrial Activity) has been declining just as steadily.

Given that Gold was one of the main beneficiaries of the first few rounds of QE and the world’s central banks have again, over the last few months, embarked on another easing frenzy one could expect that Gold will begin to rise again.

In that context this long term chart of Gold, as measured against its 55 week moving average, makes for very interesting reading.

Since the 2001 low of US$255.00 oz the 55 week moving average has done a simply amazing job of defining the major trend. Now the recent sharp drop to US$1.672 oz very much looks like the low made in April 2009 before Gold embarked on a massive 122% rise. (This was the same period that my Mr Silverballs rode NZ$1,500 to NZ$1,000,000 in Silver using the leveraging capabilities of the BBY Online system).

Further hardening my resolve that Gold may be on the cusp of another strong rise after a 13 month consolidation, the weekly bounce off the 55 week m.a. was a ‘bullish engulfing week’.

Chart 1 – The 55 week m.a. documented.

55 m.a. – Click here to view chart

Chart 2 – A closer look at the recent bounce.

A closer look – Click here to view chart

I think that this could be one of those very rare occasions where an truly stunning opportunity exists. I have multiple ideas on how to capture any ensuing move should you be interested.

Cheers G.

Tags: Broker, Bullion, CFD trading, CFDs, Commodities, Copper, Foreign Exchange, FX, FX trading, GFC, Gold, Gold investment, Gold trading, Precious Metals, Silver, Silver trading, Trader, USD