Gold Churn Continues
Gold continues to churn like themouse on the wheel, running very fast only to end up in the same place that itstarted. For the past couple of months, that has been the story -- run fast butgo nowhere.
There are many signs pointing toa possible gold breakout to the upside, the biggest being the ratio to the S&P.The S&P has been outperforming the metals by a large margin and appears to bestretched to unsustainable levels.
Typically, when this type ofpattern occurs, and the rubber band has been stretched, we can expect a springback to the mean. Certainly, there is no guaranty that the ratio will narrow,and gold will rally, but based purely on the math, the probabilities are high.
As long as gold can hold the $1,190level, our expectations are a big rally is coming and gold will break out tothe upside. The first resistance level to watch is $1,220.
Contributing tokitco.com
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Bubba@bubbatrading.com www.bubbatrading.com/ Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.