http://www.financialsense.com/fsu/editorials/gofsky/2009/0724.html

Gold is on the cusp of a massive breakout and a move above $1040 will make all 3 bullish chart patterns valid and give targets of $1200-$1300 by Dec 2009 and much higher targets later in 2010.

The three bullish chart patterns are.

1. A massive head and shoulders bottom.
2. A Cup and handle pattern.
3. A wave 3 up move.

The only bearish view is that there is still a wave c bottom to come in gold that would take gold to the low $700 level before the wave 3 rise would start. My belief is that this outcome is highly unlikely and the odds that gold makes a big move right here are 3-1.

Also the last 2 major moves in gold in 2005-2006 from $450-$700 and 2007-2008 $700-$1030 both started in late July and lasted all the way to the March/April time frame almost straight up!. We are at this sweet spot for gold and gold stocks right now!

Here are 3 charts that explain my point of view. One bullish gold chart with all 3 bullish views labeled and the bearish chart on gold, and the chart of the XGD which is an ETF of Canadian major gold stocks.

Edwardgofsky.com

Copyright © 2009 Edward Gofsky
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