Gold prices touched their highest since mid April overnight on expectations that the Federal Reserve could be set to unveil another round of monetary stimulus to combat weak growth…as of 7:15 am Pacific, the yellow metal is off $1 an ounce to $1,670 after climbing as high as $1,678…Silver, which was up 10% last week, briefly went above $31 an ounce but has since pulled back slightly…it’s currently up 17 cents at $30.99…Copper is unchanged at $3.46…Crude Oil is down $1.20 to $94.95 while the U.S. Dollar Index is off slightly at 81.59…as John showed last week, the greenback is technically oversold and could rally somewhat but a head-and-shoulders top appears to be forming on the charts…

Gold is poised to climb the most in two years as a bet against inflation as prospects of coordinated global central bank action continue to grow, according to a Bloomberg survey…bullion for immediate delivery may reach $1,800 an ounce by the year-end, extending gains this year to 15%…that’s the median forecast in the Bloomberg survey of 15 traders and analysts at a conference Saturday in Hyderabad, South India…that would be the biggest yearly gain since a 30% surge in 2010…Gold appears destined to gain ground for a 12th consecutive year…PIMCO boosted its Gold holdings to 11.5% of assets this week in its Commodity Real Return Fund, which comes on the heels of recent updates hat George Soros and John Paulson each significantly raised their respective stakes in Gold as well…

Anticipation regarding Friday’s Jackson Hole speech by Fed Chairman Ben Bernanke will likely give a healthy undertone to Gold the next few days, though the yellow metal is short-term overbought as shown by its RSI indicator…last week’s $55 an ounce jump took Gold through important resistance levels at $1,620 and $1,640 which now become support…it’s also now above its 200-day moving average (SMA) for the first time in half a year…

Gold has also moved above its 65-week moving average of $1,650…

Updated Silver Charts

Silver shot up nearly 10% last week ($2.73 an ounce) to $30.82 and has started a powerful “Wave 5″ advance in our view…however, along the way to much higher levels it must pause for short periods from time to time to catch its breath and unwind overbought conditions…now is likely one of those occasions…as you can see on John’s 6-month daily chart, the RSI became overbought at the end of last week at 80%…this doesn’t mean it can’t become even more overbought in the coming days, but a modest pullback in the very near future is not only warranted but healthy from a technical standpoint…note how Silver is also once again rising faster than Gold…

On the long-term 15-year chart, Silver looks very powerful after completing Wave 4 at support at $26…on this weekly chart we expect Silver to get into an overbought condition for an extended period, similar to 2006-2007, 2008, and 2010-2011…