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Sunday, June 7, 2009


I don't really track commodities because its not my thing and they are more unpredictable.

I thought it would be interesting to compare a bit on how COMEX spot gold prices align with Randgold Resources LTD which of course has somewhat followed the spot COMEX prices up and down over the past few years.

But recently Rangold GOLD had a breakout above resistance and ran like a gazelle on a tight channel all the way to $74.21. What does this mean when the price of actual gold is still below $1000?

First let me say EWI tracks spot gold prices and have been calling for GOLD to fall below $700. Its taking its sweet time though and has managed to persist in the $900's. During this time Rangold has broken over the resistance whereas regular gold-gold cannot break over this $1000 barrier with any conviction.

If EWI is correct in that gold prices will head beneath $700 before anything of a breakout over $1000, then I suppose Rangold's GOLD will be following.

The recent tight channel upwards suggest some kind of either a 5th wave peak or some nasty cruel expanded [B] wave flat and the next major move will be a crash all the way back down to under $20. At least for the short term I can see a target of of Rangold GOLD back down tp $59 - $60. Maybe even a backtest of the breakout at $56. A break of major support of $56 will be very bearish.

In the long run I have no strong opinion on what the spot price of gold will do. I do know its in the best interests of every central bank in the Western world to NOT have Gold prices run high.

Also in a primary wave 3, EVERYTHING should be selling in a fear-driven mass selloff.

Bonds, equities, and commodities will sell. That is the theory of EWI's "all-the-same" markets. And we saw evidence of everything selling off at once back in the hard crash of Sep-Nov 2008.

As a side note for conspiracy buffs, all these "faith-based" fiat currency systems (including yes the almighty dollar) do not wish gold prices to do well. Its not in their interest to have a competing monetary system.

But regardless, P3 has no safe havens. Remember commodities are based on sentiment also. But in a P3 everything must go. I would not count on gold going up in any financial crisis.

I also don't think its bad to own some physical gold though as in actually having it and being able to see it. I'd never knock that. The stuff you buy in ETF's is largely a scam anyways if you ask me. You'll never get your grubby hands on actual gold via paper trading systems its probably all a shell game. But I digress.


  1. Prechter said cash is the only safe haven in P3

  2. What do you make of that MACD spike in the 1st chart? Looks unhealthy to me.

  3. b/c Prechter believes DE-flation is the theme of this entire cycle

    I agree

    the only thing that increases in value in a deflationary environment: CASH

  4. DE - I see current GLD anf GDX topping right now. Strength of this pullback is TBD but they are in a near term top for sure.