It may not look like much on a chart, but it is technically significant when a market price closes out the week, month or quarter at its high for that period. And that’s just what gold did yesterday. This is happening despite the easing of tensions somewhat in Iraq, and the fact that Chinese gold imports remain flat (for now).
Yeah, I do think that's bullish.
Here is an updated shot of the gold chart I posted on July 21st.
It could take some time for this inverse head-and-shoulders to play out, if that's what it is. You have time to get onboard. Start making your shopping lists now.
One more chart. I want to show you a chart of gold miners (The GDX) divided by gold (The GLD). The lower this gets, the cheaper gold miners are. When the line starts to go up, gold miners are getting more expensive compared to gold itself. Guess what's happening now?
Here is some news I couldn't squeeze into my Gold & Resource Trader issue today.
- Five-month China HK gold imports flat y-o-y, but again trending down. Larry Williams worries about China's gold imports. He's a smart dude. You can read a Reuters story on this here. But I would say to this that we don't know how much gold China is importing through Shanghai now AND China manufacturing numbers are showing real improvement, which should or at least could light a fire under Chinese gold demand going forward.
- South African Miners Quit World Gold Council on Costs. That is not a vote of confidence in South African gold mining, which is bearish for South African gold supply, which is bullish for gold prices.
- Gold Gain Obscures Fund Outflow as Investors Buy Equities A good roundup of gold stats, most of which seem bearish. So riddle me this, Batman: If all the gold fund flows are bearish, why are gold prices going up? Yes, the US dollar is weaker. But gold and the dollar don't always move in the opposite direction. It has to be something else.
Here's one answer: If something rallies on news that is supposed to be bad, that's quite bullish. Also, there are things yet to be revealed which are moving the market now.