We kick off with a quick look at the chart where we have included the 150dma as gold prices have bounced off the 150dma once again, as they did in August 2010. The technical indicators, RSI, MACD and the STO look to have bottomed and are now heading north with plenty of open water ahead of them. Also note that the US Dollar had a bad hair day today, slipping down to the ‘77′ level before stabilizing, well at least for now.
Richard Russell of the Dow Theory Letters in an interview on King World News had this to say regarding the dollar:
Ironically, the media seldom attacks the dollar or fiat currencies. The media never mentions that fact that most fiat currencies have died within 40 years of their original creation.
Yes, it’s a strange, strange world we live in. And I expect the year 2011 will be a year when a great many questions will be answered. Stock market, the dollar, gold, interest rates — we await your verdicts.
In the meantime, I believe the surest bet is as follows — the US dollar will continue to lose purchasing power. All else will stem from that phenomenon.”
The historical inverse relationship of the dollar down and gold up may be about to re-commence as the transparency of fiat currency becomes more widely understood by the masses. Debt continues to rocket, politicians continue to pacify, the printing presses rumble on endlessly through the night, social unrest shows its face as capital cities are marched on by the worlds poorer people. The state of affairs in Egypt is almost a mirror image of what took place in Iran some years ago when the people ousted the Shar and the existing government. We suspect that the Egyptians will settle for nothing less than the immediate removal from office of President Mubarak as their disenchantment gathers momentum. However, this issue appears to have been largely overlooked by the investment community as the manufacturing figures took centre stage and the DOW gained 148 points in todays trading session.
Moving on to the silver space, the volatility continues with silver prices putting on half a dollar today, boosting the share price of many of the producers as the table below shows:
This may indeed be the turning point as both gold and silver form a base from which to catapult to higher ground filling the coffers of the producers in the process. As this happens and balance sheets begin to glow we may well see the HUI make spectacular gains, however, it remains uncertain in our humble opinion that the stocks are ready to outperform the metals.
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Over in the options trading pit we have just closed 3 more winning trades, so we now have 62 winners out of 64 trades, or a 96.87% success rate.
If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.
The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.
So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.
Stay on your toes and have a good one.
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