Gold is at an intriguing stage in its price discovery process. Last week we had a breakdown in price followed immediately by a reversal, creating a strong reversal day signal on large volume. This is an exact repeat of what happened in late December. I didn’t pick this up until the weekend.
We also have the gold miners refusing to follow gold lower but instead making shallower lows and beginning to rise…non-confirmation of the declining trend in gold.
We will know shortly if gold has made its final low for this correction soon. A break above $1310,$5 above its current price will pierce the down trend line, creating another signal of a trend reversal. We also have a top at $1330 that,if pierced, confirms a change of trend.
On the flip side, we have a FMOC meeting this week, and the last time that happened gold was slammed $30 in one session.
One thing is for sure, and that is the strength gold is showing when it should be plunging. The final low for the 3 monthly cycle and yearly cycle is just around the corner, and it looks increasingly like it will not penetrate the December low.
I am feeling happy today, I found an Australian miner, Beadell Resources (BDR), that did not participate in the strong rally out of the December lows, so it now has the best fundamentals of all the Aussie juniors. There are no hidden problems eiyher as all the big local and international banks and brokers have strong buy recommendations on it. I only find a bargain like this once every few years, so I am buying some now and then will wait to see what gold does over the next four days.