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« High River Gold Limited 06 April 2011 | Main | Sprott Physical Gold Trust: Update »
Tuesday
Apr052011

Gold Prices Update 06 April 2011

gold chart 06 April 2011.JPG



This is a super chart, months of consolidation followed by a strong breakout by gold prices to another all time high. During this period of consolidation both the 50dma and 200dma have moved up to support gold providing gold with a solid foundation on which it can build the next leg of this rally. In the short term the RSI still has room to move higher so hopefully we can consolidate at these new levels for a week or so and then blast off to higher ground.

We now need to take a serious look at the HUI as many of the gold producing stocks have performed poorly over recent times so this breakout should hit the ignition button at least on the quality stocks to begin with. At this point you need to be clear about your objectives. If it is exposure to gold via the producers then you need to focus on the quality stocks in that group. If you are more of a speculator and plumb for the explorers, do bear in mind that many of them will never discover any precious metal whatsoever, so you will have missed out on golds move. If you have access to very good data and advice then you may bag the occasional big move and have cause for celebration. However, stay focused on the 'return on capital' that you achieving as this is all that really matters. A few big winners and a hundred losers wont do much for your investment account. As for your 'stash' of physical gold and silver, this is not for sale, you acquired it for the long haul which is only just getting started. If you have a monthly purchase plan then keep it up, make cuts elsewhere, in a few years time these prices will look ridiculously cheap.

We will be back shortly with what we see as opportunities in this sector.

Now, this is a piece from a missive that we received from Jim Sinclair this morning which says it all:



Dear Friends,
 
I am writing to you from the Irving Farm Coffee and Internet cafe in Millerton NY. Our internet carrier went down today and is showing no promise of revival in the near future. I have a great coffee and a raisin bran muffin by my side so overall I have no grounds to complain.
 
Gold linked to the dollar today certainly has taken down $1444 for the count on three taps. That lights up Angel $1521 as the next to be captured.
 
Expect the Round Number Effect at $1500 for gold, but less severe than the battle at $1400. Angel $1650 is quickly coming into focus.
 
If we have learned one thing, it is not to get short term focused on this market. Stay focused on what is important and not the noise.
 
Think for a moment if Armstrong and Alf are right on gold. That would mean the following prices are coming:
 
$1650
$3000
$5000
$12,500
 
Those prices are possible because the balance sheets of the entire western world financial entities are based on false assumptions yielding valuation that pass auditing (FASB) but will never come to fruition. It is the mark to maturity method that not only used the BIS but other institutions that give comfort to the masses that are not looking at self protection here and now.
 
The financial system of the entire western world is FUBAR and there is no intention anywhere of fixing the problems at the level of its cause, OTC derivatives. The EU outlawed naked credit default swaps which is a clear comment on their ability to work if put under pressure. This is regardless of whether they were margin or naked in my opinion.
 
To say this is it is to be very late to the game.
 
Realize that the system has already failed.

Realize that there is no champion in a power position with the will to fix it.

Realize that even if there was a true fixer there are absolutely no tools to apply that would not in a short time cause more severe pressure than before applied.

Realize then that there is no PRACTICAL means to get the western world financial economy back on its feet

Realize that since the entire western world financial entities are based in sand there can be no sustainable economic recovery anywhere in that group.

Realize that a third war of any degree is madness.

Realize that our actions in the Middle East will cause increased hatred of the West.

Realize that the problems in the Middle East are not pro West or pro democracy.

Realize that gold is going to some degree make my long term price objective, given you ten years ago, look so low it will be silly.
 
Hold on to your insurance because you need it now. Pity the anti gold hedge funds short gold and gold shares based on, in my opinion, egomania, for they are very short lived now.
 
It is not a question of if we will prevail. We have already prevailed. Now our holdings are on the march to discount the hyper-inflation that is already written for history books to come.
 
Respect the fact that the same forces driving gold have historically driven equity market in past similar historical situations.
 
Respectfully yours,
Jim

Our intention is to hold onto our core positions and look to acquire more of our favourite stocks and options as and when we consider them to be bargains.



Smile you are gold bug!



..................................................................................

Over in the Options pit, our model portfolio has managed an average return of 41.23% per trade, 68 closed trades, 66 closed at a profit, or a 97% success rate. Average trade open for 42.76 days.

SK Chart with profits re-invested 29 March 2011.JPG


The above progress chart shows our performance when profits are re-invested, 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.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.


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Reader Comments (2)

I am prepared for the fireworks, but to the downside. Don't see any angels, but a hell for gold bugs. The last bounce, this is what it is, my target for the low this year is either 1140 or 700.

April 6, 2011 | Unregistered CommenterDi

Hmmmm...

Care to stroll down the memory lane of your predictions Di?

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I put another short on gold today. Looks like another top. Stop at 1438. By end month it should be at 1320-1340.

Comment by Di — March 23, 2011 @ 1:22 pm

****

Excellent drop in silver today, in a few weeks we are going to see 1000 gold and 20 buck silver.

Comment by Di — March 15, 2011 @ 12:47 pm

****

All indicators are bearish. At least it’s going to 50MA here. Bulls have not a single point in a favour of a trend continuation.

Comment by Di — March 12, 2011 @ 2:20 pm

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technicals on gold are deteriorating day by day. we only need to close below 1166 to confirm the weekly downtrend.

Comment by Di — June 4, 2010 @ 2:39 pm

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Well i am calling for 320 gold. It is going to be the only asset that will not make a new low, but it will fall a lot from current level. You can see below 500 gold prices with DOW/GOLD ratio unchanged. (actually right now it is flat)
Gold made a new final high at 1220 , sold off on huge volume and now it trades within a range respecting that high. The trend changed and now will last for about 2 or 3 years. Technically it is a very good bear trend, we are making lower lows and lower highs (daily and weekly). When the trend is strong, gold usually doesn’t have big volatility and that’s what i am seeing now.

Comment by Di — March 22, 2010 @ 1:27 pm

**********

There's really not much to say. The record speaks for itself. Abysmal. But I have to hand it to you. You're persistent.

Me...I enjoy making money in raging bull markets rather than losing it fighting the tape, but I'm funny that way.

Did you ever hear the advice that you can be long or out in a bull market, but never short? It's good advice, even for the pros.

April 6, 2011 | Unregistered Commenterfallingman

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