BUY GOLD! – PURU SAXENA – KITCO
Two day ago, the price of gold broke out to a new high and we are delighted with this result. As you will recall, we were expecting an upward breakout in gold and it looks as though its price will now surge over the following months. It is noteworthy that since the breakout occurred, gold has managed to stay above the previous high. The longer the price of gold stays above US$1,030, the greater the probability that the yellow metal will stage a spectacular rally until spring next year.
It is our contention that this breakout is the real deal and the pathetic action of the US Dollar Index supports our view. Rather than rally, the American currency has embarked on another southbound journey and this is extremely bullish for gold. Furthermore, the recent zoom in silver and the precious metals mining stocks is additional evidence that this breakout is not a head fake. Figure 1 highlights the recent breakout in gold. As you will observe, gold’s bull-market has been punctuated by lengthy consolidations and this is the third time gold has broken out towards the end of the third calendar quarter.
Figure 1: Gold is about to shine!
If history is any guide and the trend consistency is intact, this rally will continue until spring next year and we could see a 40-50% advance! Should this rally materialise, the mining stocks will go ballistic and silver will rocket above its previous bull-market high.
In light of the recent breakout, we suggest that you hold on to your positions in the precious metals sector and add more capital.
The long wait is finally over and precious metals bulls are about to get rewarded! We plan to hold on to our positions for several months and will consider booking profits when we see an epic blow-off early next year.