Gold at inflection point.

Gold may be at a what some people refer to as an 'inflection point.' In this case it means that gold prices are poised to start changing at a faster rate. This can be seen both on the chart that depicts gold on a weekly basis (top graph) and on a daily basis (second from top graph). Looking at gold price on a shorter basis (third graph), we see a wedge formation that indicates a coming change. The same wedge pattern can be seen in the Index that tracks the PM miners (HUI, last graph).

We are in the early phase of the new trend (i.e. faster change in gold prices), so Analysts wait for confirmation. There was a breakout of gold on the upside then a very fast drop to 1,700, which was partially reversed during the same day. A same day reversal in price is a very bullish sign. Then gold began to trade sideways around 1,820 and is now poised to move out: either up or down.

What would drive gold prices upward? On the European side of the Pond, German Chancellor Merkel has caved on the issuance of EuroBonds, which is the European version of our QE. The FED is about to meet in September and it is anticipated that some form of QE will be announced. In the meantime, Obama is to announce a new jobs program of maybe as much as $1.6T and even if the cowardly Republican pare that to half, it will add that much to the deficit and the National Debt.

The new Obama jobs program is a purely political gimmick. Government spending is counted as part of the GNP, so adding that much spending is designed to create the perception that we are not in a recession. It is a re-election gimmick by Obama. While, Obama and the Media may fool the Country and the cowardly Republicans, they can not fool the Market. Gold is going up. Gold miners will go up.