1. Personal Note

As I am writing these updates free of charge I´d like to ask you one favor: Could you help me raising my subscriber base by forwarding this newsletter to all your friends and people who might be interested in please? Here is the link. THANK YOU!

2. Update

Reasons for lower prices:

• US$1,790.00 (Gold) and US$35.00 (Silver) continue to be strong resistance
• MACD, RSI & Volume did not confirm new intraday highs
• possible bearish wedge developing in the Gold chart
• Sideways action since 16 days with high volume could be interpreted as smart money distribution
• Silver is loosing momentum and did not do as good as gold recently
• Gold & Silver Ratio caught in between 51-52 and is moving sideways
• COT structure now even more bearish. Commercials own biggest short position in the last 16 months!!!!!
• Sentiment readings 3rd week > 80% bulls
• October historically worst month for gold (Gold usually hits a low just as the Hindu festival of lights "Diwali" starts which is 13th of november this year)
• CRB Index is making lower highs & lower lows recently
• VIX at record lows. Shows extreme complacency in the stock market (Apple has negative divergence in RSI & looks vulnerable)
• Small Caps and Technology are showing relative weakness
• Oil prices are down more than 10% and Gold/Oil ratio shows that Gold is expensive compared to Oil

Reasons for higher prices:

• Gold & Silver are still close to their highs, any setback is bought immediately
• Expected correction ended at the middle Bollinger Band (V-Formation gives a price target for Gold around US$1,840.00)
• Slow Stochastic in the daily gold chart embedded again
• Slow Stochastic in the weekly gold chart still embedded (= very strong uptrend)
• Strong rebound in EUR/US$ is bullish for metals
• Point & Figure Chart still very bullish (reversal with a daily close below US$1,555.00)
• Strong Support for Gold at US$1,770.00/ US$1,750.00/ US$1,735.00
• Bollinger Bands going sideways & moving closer together (=new pressure building)
• Monthly Bollinger Band offers more room to the upside. Currently US$1,847.41
• New uptrend in precious metals since august 2012 that should carry gold up to US$1,880.00-1,920.00 until end of the year or spring 2013.
• Seasonality until spring very promising.
• Never fight the FED. Unlimited QE -> money printing all over the world will push asset prices in all sectors higher...
• FED might want to keep the markets up until presidential election
• New strikes in South Africa reduce supply
• very instable and dangerous situation in Syria/Turkey.
• Iran is accelerating towards hyperinflation (black market rate for Iranian Rial is down 65% since July 2010 against USDollar)

Conclusion:

• Either strong correction will start within the next couple of days and bring Gold down to 50 MA (US$1,691.89)
• Or we will first see a final move up to around 1,845.00 before Gold will start a nasty correction
• Tighten stop loss of any paper gold/silver position. Immediate and important support is US$1,770.00 and US$1,755.00.
• This is not the time to establish new long positions.

Longterm:

• Nothing has changed
• Precious Metals bull market continues and is moving step by step closer to the final parabolic phase (could start in 2013 & last for 2-3 years or maybe later)
• Price target Dow Jones/Gold Ratio ca. 1:1
• Price target Gold/Silver Ratio ca. 10:1