Gold Bull Alive and Well ……….at least Outside the United States!
Commodities / Gold & Silver Oct 14, 2008 - 02:01 PM GMTBy: Ronald_Rosen
Certain subscribers from Australia and Canada have been writing in during the year saying that they had bought gold when it was at $x, gold had gone up, and yet their investment had not. Well, with the exception of US citizens, gold is in a roaring bull market because of the exceptional strength of the US Dollar since March of this year. Far from topping out in March, gold in other countries is still reaching new highs. This strength caught most investors out, and particularly a number of hedge funds which have had to liquidate because of losses incurred through being short of the dollar and long commodities.
These liquidations, combined with certain investment banks massively shorting gold have put considerable pressure on that true store of value in US Dollars. For those of us in Great Britain , Gold is still reaching new highs in British Pounds.
For those down under, in Australia and New Zealand, you may not be able to afford to travel any more due to your currencies falling substantially against the US Dollar but your bars of gold can be cashed in at all time high prices now, with gold surging 35% in the last month.
For those in Europe , the Bull is as powerful as ever, reaching new highs on Friday.
Even for those of you using the “Loonie” in Canada , where your currency reached parity with the US Dollar at one stage, your Bull market in Gold is intact.
The good news for those of you not in the United States is that I believe that the US Dollar will continue getting stronger into the middle of next year (though in the short term I am expecting US dollar weakness to start soon and last the next couple of months).
I shall be doing a separate currency update soon but below is a chart showing how the US Dollar Index has pared more than 50% of the dollar's fall over the last three years.
In returning to the big picture on gold, I am expecting the 96-month cycle low to reappear in March (see chart below) and this is likely to be the end of the C wave of the Major A, B, C correction from March 2008. It is likely to be fast and furious and take gold down to retest the lows or even down to the next level, the 50% retracement at $642.
We completed the A wave down in the week ending 12 th September and the “a” Wave of B has taken 4 weeks. The “b” of b will probably take a similar time and bottom around $777. The Stochastic is rolling over showing weakness ahead, as is the MACD.
Ever since we bottomed on 11 th September, we have had some extraordinary moves from Gold. On 17 th September we had the biggest one day move since 1980 and on Friday we had the biggest on day fall since 1980 with a fall of $107 from high to low. Also, Gold has traditionally run inversely to the US Dollar but last week it was rising with the dollar.
If indeed the “a” of B is in on Friday, it has arrived a week early for ITD 5 which normally has a very good record of a timely arrival with an AR (Accuracy Rating) of 20.
It is also worth noting that Wilder's Parabolic Indicator (2 green dots over the last day's candle show that the trend is down. Whilst in the very short term it is oversold and due a bounce, I expect it to resume its downtrend in a few days.
As usual, I will keep you posted via the Bulletin Board of any developments and targets as they emerge.
For the Delta short, medium and long term turning points on gold, silver, the HUI gold share index, crude oil and various other indices:
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Ron Rosen and Alistair Gilbert
M I G H T Y I N S P I R I T
Ronald L. Rosen served in the U.S.Navy, with two combat tours Korean War. He later graduated from New York University and became a Registered Representative, stock and commodity broker with Carl M. Loeb, Rhodes & Co. and then Carter, Berlind and Weill. He retired to become private investor and is a director of the Delta Society International
Disclaimer: The contents of this letter represent the opinions of Ronald L. Rosen and Alistair Gilbert Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Ronald L. Rosen and Alistair Gilbert are not registered investment advisors. Information and analysis above are derived from sources and using methods believed to be reliable, but Ronald L. Rosen and Alistair Gilbert cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.
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