gold prices

As Britain goes to the polls, gold says “Goodbye” in fine style to the man who dumped half the UK’s reserves on the market in May 1999…

HOW SWEET of gold to mark Gordon Brown’s last day in power with a new all-time high against the Pound Sterling.

He did so much, short term, to dent the former. But his famous “prudence” – in truth, an abject misreading of both economics and history – has in fact worked to destroy the latter instead.

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Precious metals have been strongly demanded during the last few months: gold prices jumped above $1,000, silver and palladium prices reached recently a new 12-month high.

What about platinum? Have a look at the chart: the medium-term bullish trend in place since last November may above soon. A correction is expected.

Indeed, 11 months of up-trend have driven platinum price to a technical resistance that is likely to prevent a further rise. The historical high price (point A on the chart) posted in early March 2008 at $2,308 was followed by several months of correction and consolidation. The real plunge started at mid-July last year. In just 3 months, platinum prices fell from $2,059 to $752 (point B, down 63%).

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“Whether through exuberant hedgies or anxious private investors, gold just keeps pushing higher…”

SO SPECULATIVE BETTING on gold going higher now equals a record-busting 752-tonne position in Comex futures and options, yet this is not a bubble according to Michael Pento of Deltaga.

Let’s say otherwise. Let’s say that gold prices, surging by almost $100-per-ounce in barely a month, are very much in a bubble…blown up by near-zero interest rates worldwide and a sharply negative cost of borrowing after inflation. Were that the case, the question before potential and existing investors would be simple:

Is this “irrational exuberance” or a “permanently high plateau”?

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Gold is on the rise again, and it is likely that its price action will test soon the previous highest levels, above $1,000. Currently Gold is trading just below this important level.

The price action has posted a high at $999, above the previous significant peak of last June (point E on the chart). This point E was posted on a resistance line that was the previous oblique support of the bullish move occurred between last October and last March. This ascending technical slope was built by higher lows where the price action was regularly bouncing back.

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