Gold: En route to much higher Levels

The chart on your left was sent out to subscribers of Michael’s precious metals letter on February 3 and illustrates his brilliant work so well. My confidence in Michael’s momentum-based work has grown as I have seen how time and time Michael’s momentum/structural analyses are more accurate than those of price chart analysts. He gets you in at a lower price and out at a higher price.  Now, as you can see in the bottom chart on your left, momentum has broken above the downtrend (green line) giving a clear buy signal. But gold has to rise further (above the red line) on the price chart before most analysts will get buy signal.  If this were a once or twice happening, I would shrug it off. But most often whatever the market, Michael gets you in at a lower price and out at a higher price.

As Michael pointed out, the breakout over the last momentum structure was achieved as price moved above $1,280 in December. The prior two momentum-based buy levels were just above $1,200 and $1,240.  Michael did admit this week, however, that he will likely be wrong in his December 7 report that in the “next fifty trading days” gold would take out price highs of the past five years. At that time, gold was at $1,240. Five-year highs meant taking out $1,392, the 2014 high. Fifty trading days after that report means by February 20. Cash gold closed this week at $1,318, which means we would have to see a $74 price of gold in the next three days. Certainly, that’s not impossible, but the odds suggest it won’t likely happen. If the five-year highs are not taken out this month, Michael says there are simply too many accumulated positive momentum factors for it not to happen very soon, followed by a “whoosh” to much higher levels considerably beyond the 2014 high.

In this issue, I commented on most of the significant stories this week. Fremont Gold begins drilling at Gold Bar in Nevada. Genesis Metals released a new resource on its Chevrier Project in Quebec. Balmoral intersected 92.57 meters grading 0.77% Ni on its Grasset Project in Quebec. Newrange Gold demonstrated 97.1% gold recoveries in initial metallurgical tests on its Pamlico Project in Nevada. VR Resources sampled 58.3 g/t and 809 g/t silver on its Clipper Project in Nevada. Metalla acquired a 1% NSR royalty on Atlantic Gold Corp.’s Fifteen Mile Stream Project in Nova Scotia. And Irving acquired two gold projects in Japan and expanded the OMU Project. Among the non-mining stories covered, dynaCERT reported that it received an order from an internationally leading mining company for three of its large engine HydraGEN products for a large Brazilian open-pit project, and Sprott Inc. announced that it will be entering a JV with the Tocqueville Gold Fund. To access these press release links, go to www.MiningStocks.com.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.