My Blog
Richard Russell - Gold is Showing a Price Objective of $1,880
With gold stubbornly above $1,600, the dollar weak and silver consolidating recent gains, the Godfather of newsletter writers Richard Russell had this to say in some of his most recent commentaries, “There isn't much clear and defined in this market except for gold. I'm including this P&F chart of gold (above), which shows a definitive breakout to new all-time record highs. How much of this is based on the Washington shenanigans I don't know, but once the debt boost is solved the test will be whether gold tends to hold its gains. By the way, the P&F chart shows a price objective of 1880.”
Russell continues:
“The latest correction in gold didn't even register on the P&F chart of GLD, and now we see GLD breaking out bullishly above its last column of Xs and delivering a bullish signal at the 154 box. Technically, this latest column of Xs could rise to the 200s, but that won't happen overnight.
We have seen consolidation after consolidation in gold for months on end. After each rather scary consolidation gold has broken out to new highs on what I call a "high pole." Hopefully, this is what we're in for now.
Note, after the whole gold correction, it's bullish to see gold trading above 1600 again.
Confusion reigns -- in spades. Therefore, I'm staying with the bull market that I trust. And the bull market I'm referring to is the bull market in gold.
I've studied bull and bear markets for over half a century. In my experience, great extended bull markets, such as the current ten-year bull market in gold, don't die with a wheeze and a whimper. They die amid excitement, torrid speculation and finally the wholesale entrance of the retail public. I've yet to see any of those characteristics in the current gold bull market. Therefore, I'm trusting history, and I'm sitting (in) the gold bull market.
My impression is that individual retail buyers from all over the world are beginning to accumulate gold in small quantities, regardless of the price of gold. Thus there is subtle pressure to push gold higher, even regardless of its official Comex price. Thus, we may be seeing just the edge, the very beginning, of retail interest in gold as a safe-haven currency. Slowly, the retail public is once again accepting gold as real money (sorry, Ben Bernanke, who recently denied that gold is money).
Wait, does it make sense for the Dow to sink while gold moves higher? Under one scenario it does. Here's the scenario. Bernanke continues to stimulate, but the newest stimulation (like the old ones) don't work, and the declining stock market is already discounting Bernanke's continuing failure.
But gold is rising on the tail of the latest Bernanke quantitative easing or whatever you want to call it. Of course, the other fire under gold is the stalemate in the US efforts to solve the boost in the national debt (monster stalemate) and the potential decline in the US's credit rating. As if that was not enough, Europe is having its chronic problems with Italy, Spain, Portugal and Ireland, none of which are even close to being solvent.
Silver! -- Silver (recently) broke out above both its 50-day and 200-day moving averages, and its MACD has turned bullish.
Bull markets have a tendency to carry all the troops along with it, and the bull market in precious metals is not about to ignore silver. Thus, all those who got frightened or disgusted with silver and sold out -- are now looking at the chart and licking their wounds.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
July 29, 2011
