CHARTWORKS 2 - FEBRUARY 3, 2009
Gold

Technical observations of RossClark@shaw.ca

Bob Hoye
Institutional Advisors
Feb 5, 2009

Possible brief correction - Gold was the big winner last week as it made all-time highs against the Canadian Dollar and Euro. In US Dollars it is above the broadening wedge (or megaphone) that has been developing over the past ten months. The initial action in such a pattern is to see the prices approach, but not exceed the high from which the pattern started. (Previous examples in gold occurred in 2002 & 1994.)

The XAU, HUI and XGD mining indices produced minor divergences by failing to confirm Thursday and Friday's strength in bullion. While this may seem very short term oriented analysis it was the same as the minor divergences at point 5 in 2002 and 1994.

Look for an RSI(14) reading below 40 to provide the next lower risk buying opportunity in this bull market.

Previous examples from 2002 and 1994

Gold qualifies as a bull market when priced in virtually any medium.

February 3, 2009
-Bob Hoye
Institutional Advisors
email: bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com

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