Gold prices are nervously coiled ready to spark on stock exchanges throughout the world.

The physical price of gold is heading up to the 200 DMA and we believe that it will go straight through it. In turn the 200 DMA will go straight through the 50 DMA and both these averages will follow the gold price upwards.

There, now our necks are really on the line.

It is said that if you can get the direction of an asset class right and have the nerve to position yourself accordingly then you should do very well indeed. We think that we have done this. However today we are going a step further with our predictive analysis to add some definition to the current picture. Always a dangerous thing to do as the possibility of getting it wrong is very high. Nevertheless, a faint heart never won a fair lady. We are 90% invested at this stage so we are in position.

Now lets turn to the chart and try to ascertain what it is telling us. Our interpretation of this chart is that we are on a collision course that will result in sparks with gold coming out on the upside. We will go even further and say the gold’s upward move will take it to the $650 level before February 2007.

If you have allocated a portion of your funds to gold shares then now is the time to invest, in our humble opinion. If you are already in, then hang on and enjoy the ride.

Always consult your registered financial advisor before putting your hard earned cash at risk, because at risk it most certainly is.

17 October 2007