RE: RE: GoldGold stock rally is the real thing
Gold shares have continued to display strength this month versus the metal with a move in the Gold/XAU ratio (lower section of the chart) breaking the long term up trend at 7.50. This is bullish in its implications. A continuation of this trend lower is what we want to see occur over the next few months. This would reinforce the legitimacy of the wave 3 move higher in the gold price.
Closing comments
Central banks around the world are presently doing everything in their power (as you would expect) to re-inflate the financial system. The trillion dollar question is will it work? When we look back to the 1970’s we can quite clearly see what their objective is. Falling asset prices do not support their cause. The mentality is everything must be done to arrest these falls as soon as possible. The result if “successful” will be a severe inflationary recession! If unsuccessful, we will be looking at a deflationary depression. History has shown that gold and gold equities perform extremely well under each of these scenarios. With an unlimited ability to print money and monetize debt, an inflationary recession seems to be the more likely of these two scenarios.
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