Current Market Rates Per Ounce September 08, 2010 4:19:24 PM PST USD $  CAD $ Gold (AU): 1,256.00  1,302.47 Silver (AG): 19.93  20.67 Platinum (PT): 1,552.50  1,609.94 Palladium (PD): 522.00  541.31 USD-CAD Exchange Rate: 1.037 J&M Coin & Jewellery Ltd. 127 East Broadway Vancouver, BC, V5T 1W1, Canada Tel: (604) 876-7181 Toll Free Ordering: 1-888-244-9999 Fax: (604) 876-1518 e-Mail: jandm@jandm.com Web: www.jandm.com

Gold Analysis and Strategy By Florian Grummes August 10, 2009 Charts courtesy stockcharts.com. Gold Daily Chart Gold Weekly Chart It's really getting interesting in the gold market. The big question is: "Will gold break through the U$1,000 level and advanced to new all-time highs or will it once again fail while trying? To be honest, I am still quite skeptical at the moment. I expect another sell off before gold can run to new highs ... but let's have look at the charts first.   Three weeks ago gold could not conquer the U$950-957 level. After a few unsuccessful attempts, a quick sell off pushed the price down to U$925. But from here, gold showed incredible strength again and, within just a few days, it went up to even U$970. Last Friday gold dropped after a volatile session down to U$954 with nearly no changes compared to the week before. Although it is still summer, the volatility was rising strongly last week. It seems something will happen soon. The technical picture still looks very positive. Gold is building up more and more pressure to break out of the triangle and through U$1,000. The rising 50d MA (U$943.26) and the 200d MA are moving up parallel. All trend lines are in place and, in the last month, every pull-back was bought immediatley. Unfortunately, the little double-top at U$970 (Tuesday and Thursday of last week) as well as the big distance to the rising 200d MA (U$887.35) reminded us to stay alert. Also, the upper Bollinger Band (U$971.55) is the next resistance. And, most important, the intraday-reversal in the dollar on Friday could be the start of a suprising dollar rally.   So far, the correction since the all-time high in March 2008 (U$1,037) is still in play. To end the correction, a sustainable move above of the U$1,000 level is necessary. Short term, another attempt up to U$970-990 seems possible but for that an immediate renewed dollar weakness will be necessary. If the August monthly close is above U$960 it is highly likely that we see the breakout to new alltime highs very soon.   On the other hand, gold should not fall below U$944 any more ... otherwise we will witness another sell off down at least to the U$920-900 level.   The long term technical and fundamental perspective for gold is still super bullish. The next price targets are the Fibonacci Extensions of the complete correction since March 2008 at U$1,250 and U$1,600. The Dow Jones/gold ratio is now at 9.80. The world wide stock market rally should have reached its final stadium. At the end of August or the beginning of September the bears will be back. In 2001 the DAX recovered within six months from 3.539 up to 5.467 points and then dropped down to 2.188 points within the next twelve months! We have witnessed very similar price action during this spring and summer so far.   Long term, I expect the price of gold moving towards parity to the Dow Jones (=1:1). The next primary cyclical change therefore is still years away. This means we are in a long-term bull market in gold (and also commodities) and in a secular bear market in most of the stock markets. Gold in EUR (one ounce = 672.47€) Gold in Euro, Daily Chart Gold in Euro, Weekly Chart As well in EUR Gold is moving slowly but surely higher. The rising 200d MA (662€) has been tested twice in July and is still an important support. If that support fails we will see much lower prices. But from a technical perspective this is pretty unlikely at the moment. Instead after getting back above the falling 50d MA (670€), gold should reach the 700€ level soon. Both Bollinger Bands were contracting during July down to a range of less than 18€, which indicates that now a bullish breakout is next. As an European investor, the price of gold calculated in euros is far more important for you than in US dollars. Don't fool yourself. From a longer-term perspective, gold is still a very good buy at or below 675€ an ounce. Gold COT Situation The commercial short position is again at frightening highs! This was neither 2005 nor 2007 the case before the big rallies in the gold market started. The commercials are more contracts short than at the end of February 2009. At that time gold dropped from U$990 down to U$863. Of course one can argue that the commercials are short since 2001 and, from that perspective, they were not "right" for the last eight years. But they always build up their position in rising prices and they covered them not before a dramatic panic driven sell-off. And they surely earned a lot of money by doing so. I still believe that a new rally in the price of gold can only start if the commercials reduce their short positions to below 100,000 contracts. Below U$900 the commercials should cover more of their positions. If we see a last sell-off down to U$880-845 to get rid off the weak hands, the COT data should look very positive again. April 18, 2009 = -153.419 (PoG Low of the day = U$885) May 19, 2009 = -183.065 (PoG Low of the day = U$920) May 26, 2009 = -208.136 (PoG Low of the day = U$939) June 2, 2009 = -226.521 (PoG Low of the day = U$970) June 9, 2009 = -225.047 (PoG Low of the day = U$947) June 16, 2009 = -207.368 (PoG Low of the day = U$929) June 23, 2009 = -194.430 (PoG Low of the day = U$913) July 7, 2009 = -191.307 (PoG Low of the day = U$922) July 14, 2009 = -182.287 (PoG Low of the day = U$917) July 21, 2009 = -204.226 (PoG Low of the day = U$944) July 28, 2009 = -202.521 (PoG Low of the day = U$934) August 4, 2009 = -228.193 (PoG Low of the day = U$950) Gold Seasonality August is a pivot month. Normally this month brings the decision about what's going in the market for the next six to nine months. Normally, starting around August, the price of gold rallies until the next spring. Therefore, the seasonality perspective supports higher prices in the weeks and months ahead. Gold Sentiment Most of the time big rallies and new bull markets are born in a panic sentiment after a strong sell-off (e.g. DOW in March). At the moment, most of the market commentators and the "gurus" expect the breakout very soon. To me, the sentiment feels way too positive and I am not planning to be moving with the crowd. Gold Mining Stocks Analysis Goldbugs Index USD (366,27 Points) - Daily Chart Weekly Chart Parallel with the DOW, DAX, most of the stock markets and gold, the HUI gold mining stocks went up as well during the last couple of weeks.   So far, at 380 points, the rally ended last Tuesday. Since then, the HUI is slowly moving down. A failure of support around 360-365 would be a sell signal. Until now the buy signal created by the MACD in early July is still in play. The upper Bollinger Band (U$383.95) makes higher prices in the coming week possible. The flat 50d MA (351.56) and the rising 200d MA Tagelinie (297.32) are running parallel like they do on the gold chart. Everything looks nice. But the HUI did not confirm the last high in the gold market on Thursday, which is a clear warning sign. Most of the time the gold mining stocks are running ahead of gold itself. As well, I have to remember you again that gold mining stocks are moving parallel with the broad stock market. If we see a strong sell off in the stock market this autumn, the HUI will be beaten down too. But in that case we will have a great buying opportunity. Conclusion The next weeks will be very interesting. There is a lot of technical evidence for the final breakout to the upside very soon. But if the long term bear market in stocks shows up again, gold will be hit as well. I therefore recommend to watch the charts very carefully. A rise above the U$990-1000 level confirms the seasonal pattern. Then we should see the next leg of this gold bull market and prices around U$1,500 in spring 2010. A pull back below U$940 indicates another wave of correction down to at least U$900-920 or even U$880-845. This could last even until early October before gold might be ready to challenge the $1,000 level again. By then (with a better COT picture) I expect gold to be finally successful. To receive my FREE bi-weekly Gold Trading Analysis reports, please visit my website at www.TheSilverGoldSpot.com. FLORIAN GRUMMES (born 1975 in Munich, Germany) is a self-employed professional full-time trader and very creative music producer and songwriter. He started trading and investing in 1996 and has specialized in the precious metals sector since 2003. He did countless trading and self-development workshops and did as well the Supertrader Program with legendary Market Wizard Van Tharp. His main focus is technical analysis but he always carefully researches fundamental and sentimental perspectives as well. He writes the very successful gold analysis "Midas Touch" every two weeks in German and English. His main passion besides trading and music is self-growth and spirituality. You can contact him at info@thesilvergoldspot.com. Home | Products and Prices | Buying | Selling | FAQ | Articles | Forms | Top Website © Copyright J&M Coin & Jewellery Ltd. 2009. All rights reserved. Pricing index programming and site hosting by Sandrix Technologies Ltd. (AXD)