Long-Term Trends Point to Gold Above $1,000

Daryl Guppy
CNBC
Tuesday, July 7, 2009

The market is alive with chatter about the weakness of the U.S. dollar, the growing demand to settle trade contracts in yuan and fears of developing U.S. inflation. Is this the time to switch from equity investments into gold?

Let’s see whether we’re ready for that golden handshake.

The weekly gold chart has two important features. The first is the series of support and resistance levels. The lowest of these is at $700 and was tested several times in September 2008. The highest of these is at the psychologically important level of $1,000. It was briefly broken in March 2008 and again in January 2009.

Rallies have moved towards this level on several occasions, but none have been strong enough to seriously break above $1,000. It remains an apparently elusive target. However, once this type of level is breached, it can lead to a very fast rally.

The second feature is the long-term trend line starting in mid-2005. The placement of this trend line presents a problem. The trend line shown on the chart uses the majority of touch points that developed in 2005, 2006 and 2007. It excludes the cluster of price dips below the line in 2008. These dips do not invalidate the trend line, but they do confirm we need to use the line with caution.

Full story here.

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10 Responses to “Long-Term Trends Point to Gold Above $1,000”

1. Madman Says:
   July 7th, 2009 at 5:16 am

   I thought it was going to be 2000 an ounce…
   If the Dollar tanks it could be 10 million an ounce, and it wouldn’t matter, because the dollars would be useless.
   The paper money will always just be paper in and ink, gold and silver, will always be valuable. Even if gold dropped to 200 dollars, it would still be worth more than any piece of paper fiat currency with ink on it.
   I’d buy silver myself… cheaper, who’s got a few grand laying around for a few ounces of gold. Silver, 15 to 20 a one ounce round, that will be the currency of the common man.

2. David Says:
   July 7th, 2009 at 5:35 am

   You’re all suckers:
   http://www.avaresearch.com/art.....s-291.html

   

   Madman Reply:
   July 7th, 2009 at 6:34 am

   Hey David,
   Great link, and I for one think Alex pushes gold a little too hard, due to his advertising sponsors. The gold bubble may very well come, it is 400% higher than it once was, so that makes sense to me. Even if it deflates to say, 100 an ounce, that’s still worth more than a piece of paper with ink on it, but a tremendous loss for most of the people here.
   I say, concentrate on your food, ammo, guns, and other supplies like water, before spending a DIME on silver and gold. Only when you are secure in your supplies, should you spend anything on assets that are only useful for trade.
   When and if the SHTF, gold and silver will be the last of the initial worries, as the store shelves will be empty, and people will be going insane in the streets, robbing, looting, stealing and shooting.

3. The Fake Patriot Says:
   July 7th, 2009 at 12:19 pm

   Shit you mean I won’t own my own castle because there isn’t going to be hyper-inflation?

   I was going to really enjoy throwing stones down on the lowly peasants?

   While I ate steak and drink wine and enjoyed my looking at my gold.

   I think that upper crust of the Patriot movement are fakes. They are all backed and supported by China, which last time I checked was a Communist country.

   What do you think of people who tell us to buy gold and silver as well as invest in China and get out of the dollar? Do you know who I’m talking about?

   Why not take your money out of the stock market and invest in your local community? Or your child’s education? Or something that people here in the USA can use? How about invest in your own company?

4. The Fake Patriot Says:
   July 7th, 2009 at 12:23 pm

   David that site: http://www.avaresearch.com/art.....s-291.html
   demonstrates how fucked up our world has become. Go down towards the bottom of the page. So if you enjoy the article you click on a few Google ads so that some other business can pay. That’s just retarded and lame and sick. No different than me wanting my castle.

   “IF YOU ENJOYED THIS ARTICLE, PLEASE SHOW YOUR SUPPORT FOR THIS SITE BY CLICKING ON A FEW OF THE GOOGLE AD SPONSORS.

   THIS ARTICLE IS BEING PROVIDED EXCLUSIVELY ON THIS WEBSITE, AND IN ORDER TO CONTINUE THIS CONTENT FOR FREE, WE NEED TO GENERATE REVENUE FROM ADS. OTHERWISE, IN THE FUTURE ONLY PAID SUBSCRIBERS WILL HAVE ACCESS TO THIS CONTENT. THANKS. “

   

   JingoBells Reply:
   July 7th, 2009 at 5:40 pm

   At least AVA is honest about the bullshit. I think that’s cool.

   

   David Reply:
   July 7th, 2009 at 8:34 pm

   I totally agree that his asking people to abuse Google’s ad system is corrupt, and I hate the way the entire site is just an ad for his books and costly newsletter. However, there are so many breaths of fresh air in that site if you have the patience to read through the freebies he gives.

5. Bart Says:
   July 7th, 2009 at 3:05 pm

   The solution is to start using gold and silver as barter now, not just as investment:

   http://sites.google.com/site/bartercoins/

6. HalSimons Says:
   July 7th, 2009 at 5:37 pm

   I tried to pay for my groceries with a gold coin. The store manager refused to accept it and when I complained, she called the police.

7. ink for cheap Says:
   July 17th, 2009 at 4:23 pm

   LOVE your site, will visit again Submitted this post to Google News Reader.