Jan 31

Gold on the Move

by Mike Paulenoff, Wed January 31st, 2007

Spot Gold prices, and the streetTRACKS Gold Shares (NYSE: GLD) continue to climb... which means what, exactly? Is there inflation in the pipeline created by an economy that has been so overstimulated by a VERY accommodative Fed (since Greenspan really stepped on the monetary accelerator in 2000), that there is no denying the reaction of gold? Or is China diversifying its FX reserves into gold, again? Or does the gold market realize that no matter what, the FOMC cannot RAISE rates again in the near future-- not unless Bernanke and Co., want to risk a housing sector implosion-- that takes the economy with it...

Who knows? The only thing we do know is that gold is on the move. Looking at the daily chart, the GLD has made post-October highs at 64.94, the highest price since August. The price structure is in thrust position, heading for a tet of the July high at 66.42 next. Only a sudden downside reversal that breaks 63.50 will begin to compromise the current very constructive pattern.

Chart

Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!