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| Gold held well during the liquidity crisis of August and has now managed to produce a new high for the year (when priced in US Dollars, but not Euros or Canadian Dollars). We look for an initial target of $725 followed by a primary objective of $775. The time window for a high is during the weeks of September 27th or October 5th. |
Breakouts are always important; however a failure to hold $685 and the 20-day moving average on any pullbacks will be considered a failure.
Gold COT
The commitment of trader's data has been supportive of the bullion price since the end of June. The commercials are short less than 100,000 contracts while the speculators have less than 80,000 longs as of the most recent report. It should take an increase in their commitments in excess of 60k to produce enough vulnerability to generate the next high in gold prices.
The Rydex data (c/o www.SentimenTrader.com) shows opinion towards gold is high, but commitments in the sector continue to be at the lower end of the four year range. A significant top is not likely until the commitments rise toward the upper band.
Seasonal Tendencies favor a rally in stocks into September-October. In the past ten years the precious metal indices (XAU, HUI, TSX Gold) have rallied well from July through September-October. A closer analysis shows that the rally from August 17th should take 6 to 7 weeks, providing a time window for a high during the weeks of September 27th to October 5th.
end of extract
-Bob Hoye
Institutional Advisors
email: bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com
CHARTWORKS - SEP 7, 2007
Hoye Archives
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