Gold Update

Gold has broken out above its resistance of $660 /oz. This is a very positive technical break through. In the coming months I expect gold to push to a new multi-year high. It appears that the excess liquidity in the market has been flushed and the price is in the hands of the bulls now.

I'm not completely ruling out one FINAL small correction back to the $640 level, but I say the odds are against that happening. I would like to note a couple items of importance regarding the gold market right now. Precious metals have seemed to follow the general stock market up and down over the past month or so. It will be very important for this correlation to be broken before gold can move higher (remember I'm quite bearish on the stock market over the coming years.) I'm most confident that the correlation will be broken. People have temporarily forgotten that gold is a flight to safety when the markets are in turmoil. In the market declines of the 70's, gold tripled in price. I don't see any reason why history won't repeat itself now.