CHARTWORKS - JULY 30, 2009
Gold

Technical observations of RossClark@shaw.ca

Bob Hoye
Institutional Advisors
Aug 3, 2009

The sixteen month consolidation of the US$ gold price continues. Based upon the history of August being a pivotal month coupled with the consolidation having a similar price pattern with 1994, 2002 and 2007 we believe that a close above $960 would be expected to trigger a move to the all-time highs.

Another fractal pattern of interest is the comparison of the multiple attempts of gold to breakout through $1,000 and the sixteen year consolidation that the Dow Industrials made before clearing 1,000. Don't under-estimate the potential on the upside.

If prices make new highs it is imperative that subsequent pullbacks merely test the breakout.

The short term swings of this year are closely in sync with the average seasonal pattern of the past four decades. Based upon it we should look for the current decline from $960 to base out within ten days.

The next rally is of above average importance. August has been a pivotal month for gold. The years in which gold managed to move through the July resistance during August there was a high reliability for the advance to continue. Recent examples are 2001, 2003, 2004 and 2005. Last year is an example of an August that failed to rally.

Jul 30, 2009
-Bob Hoye
Institutional Advisors
email: bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com

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