About a month ago now I began pointing out two trends in the gold chart that I believed had a good amount of validity. It just so happens that my assumptions were correct as today gold has broken above the upper convergence trend line to approx. $980. I think that if we break $980 our next major resistance is the $1000 level.
Since september is notoriously the strongest month for the precious metals I think what we're likely to see here is gold prices between the $990 and $1000 range. I have a feeling that they will ultimately fall back a bit in november because its traditionally a weaker month for the metal. So for now my thoughts are this....
Hold you short positions in the equities, especially financials for the next few weeks.
If china's Shanghai index is any foreshadow we have a few weeks of downside movement ahead of us. At that point I think I will sit tight until gold prices fall down a bit in november and then I will hop into a silver position for the coming of the new year. If you look at historical charts you'll notice that precious metals tend to do well with the start of the new year, especially around late january/february.
