Gold breaks out on upside.

The last post uncovered a wedge formation both, in the plot of gold and also HUI (the miners index). This time I am reporting that both Gold and HUI have broken out of the wedge on the upside. The MACD's are very bullish for both. This time, the move in gold is confirmed by the move in HUI. In fact, the HUI 50 DMA has crossed the 200 DMA on the upside, which is also very bullish. Note also that the miner index has surpassed the value it had in April. Thus, we are beginning to re-establish the pre-April 2011 pattern of the miners moving up faster than gold.

Let us discuss now several issues related to the gold price.

Issue #1. Larry's calculations predict gold prices of $5,000 in the time frame of 2013-2016. This would mean that O'Bummer got re-elected in 2012 and he succeeded in destroying the US dollar and economy. I do not believe that this will happen. I believe that we will follow that 1980 scenario, O'Bummer will get defeated and gold will hit its high between now and 2012 Summer.

Issue #2. Larry's formula predicts that gold will not hit 2,100 till way into next year. My calcs show gold hitting 2,100 sometime in September and October.

Larry said that if gold hits 2,100, it will then head into the next up phase.

Issue #3. KWN reports that customers now want direct delivery of gold and the bouillon banks can not influence that. In fact, there is not enough gold to go around and the shortage will show up in fast price rises and the breakout of the gold and silver mining stocks.