"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Friday, September 2, 2011

Gold - 4 Hour chart update

Gold has solidly taken out resistance centered near $1840 - $1845 and has now moved directly to the next level of chart resistance near $1880. This is the last barrier before a retest of the former all time high near and just above $1900 is in order.

That gold is doing this even as the Dollar is moving higher is evidence that it is trading primarily on currency related issues now ( currency debasement by the respective monetary authorities).

We are back to looking at the same issues that have driven the metal higher in the first place - deliberate currency debasement efforts by the monetary authorities ( aka loose and extremely accomodative monetary policy combined with official sector buying of government bonds ); raging inflation in the far East, particularly China and South Korean; and three, enormous federal budget deficits in the West. Throw in a good dose of rotten economic data releases which will reinforce the need for accomodative monetary policies resulting in NEGATIVE REAL TERM YIELDS for savers, and you have a perfect storm for higher gold prices.

That is the situation from a fundamental perspective. From a technical chart perspective, we will watch to see how gold acts should it make a move towards $1900. I would expect an all-out effort by the perma bears at the Comex (bullion banks) to check the metal at this level and attempt to paint a technical chart pattern known as a double top. They know full well that if they are unable to absorb the plethora of bids or buy orders that will come into the market as its price rises and thus fail to hold it below $1900, gold will be at $2,000 before the month is out.

I should point out here that gold has also made a Brand new all time high WEEKLY SETTLEMENT PRICE.


  1. HUI breaks above 610. Crude oil is below $90. Gold regains its strength just one week after a sharp correction.
    This has got to be good for miners, yes?

  2. Thank you again Dan for your insight.

  3. I want to first thank you Dan for all of what you do. I have to comment more, because I am a middle America. I have reviewed, analyzed, and followed up on your post for the last 2 years. I found you through a Jim Sinclair post. Since then, I have learned much. I am an ex-commerical equipment Finance guy. A guy who has worked his way from restaraunt waiter through college in the early 80's to a learder in the construction/equipment markets. My analyst position at GE Capital (when GE was a free market company) saw many a miners requests for the Big Rock trucks that haul the ore bearing rock. I loved it. I learned alot, mostly about the per ton cost of gold. Back then and up to 1998, I felt proud of my company. It all changed. I went to work financing heavy equipment for many company's. I did well. I understand more than I could explain but alot less than you traders. What has now transpired is sickening me. My Roth is what I now need to earn me a decent part of my future. I have watched in earnest the disheartenning treatment of the Miners. It seemed almost unethical and quite discerning to see them beaten to death. I have read much about Mr. Li and the death of "traders". You have been a true beacon of light for me. I have not appreciated nor liked the treatment from banking personnel and how they handle people who have given their soul to trying to solicit equipment backed loans. I have seen some banks hire me away with money, only to suck the customers from me, and then turn me out, and let me go. I am 51. Now they wont hire me. They want rabbits whom they can control and not let them think for themselves. My money invested in these miners has kept me up at night, peering at a mobile phone hoping they would follow gold. It has disheartened me tremendously. I have wateched Market Watch pop up with stories about the end of the gold bull. I even sent a reporter an email asking about her credentials as she knew nothing other than headline news that tried to indicate gold would fall. She sent me an email back and said "I am but a reporter, not a gold expert". I thought when you are paid to write you should support your supposition. Anyhow, today, Yahoo, discontinued the ^HUI on their web page allowing only the daily ^HUI. They wont let you do a chart. I find all these things extremely weird and suspicious. Thank you Dan. With your Blog I have become engaged, learned, and hopeful. Please keep it up.


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