Ben Bernanke saved gold from breaking down through its medium term support line by announcing that the Fed was going to pump yet more money into the system. This “surprise” announcement sent the USD dropping like a stone and gold prices jumping up, before pausing at the end of the week to form what looks like a pennant formation.
We wrote earlier this week about how we were waiting for some sort of technical signal from gold to tell us which way the yellow metal was heading in the short term. With the bullish crossover in the MACD it looks like gold is going to challenge $1000 in the next couple of weeks, and this move will be confirmed if/when gold prices go through $975. It is likely that this moved above $1000 will eventuate in a new all time nominal high for gold prices, which will grab the media attention and probably add more bullish pressure to gold prices.
Where do they go from there? Well we will cover that if and when it comes, so stay tuned and hold on to your gold positions!
We are nearing “the point of no return”. Bernanke is opening the Pandora’s box of inflation by letting the printing presses run wild, we view gold as an essential holding at the moment.
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