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A historical chart showing gold prices and gold stocks revealed that after a prolonged downside, gold has spiked to make fresh highs. A projection based on the historical chart shows that Gold’s initial rebound ..

18 Jul 2013

NEW YORK (Commodity Online): Readying to exit from gold? Wait. Think again. Gold is set to hit roof yet again and in a shorter span.

A historical chart showing gold prices and gold stocks revealed that after a prolonged downside, gold has spiked to make fresh highs.

In an article, Jordan Roy-Byrne, CMT explains that a projection based on the historical chart shows that Gold’s initial rebound would peak at around $1500 in February 2014.

“We looked at how Gold performed following its bottoms in 2004, 2006 and 2008 and merged the data into one. Then we applied it to last week’s close of $1212. The projection shows Gold’s initial rebound peaking around $1500 in February 2014,” the author writes.

“Then it would consolidate until next summer. This makes sense considering the big breakdown occurred just above $1500. It is likely to mark the first big resistance post-bottom,” the article says.

After a weak session on Wednesday, gold prices advanced on Thursday. Gold futures for December delivery rose 0.4 percent to $1,283.90 an ounce at 10:15 a.m. on the Comex in New York. The metal touched $1,301.10 yesterday, the highest since June 21, before erasing gains.

Spot gold quoted in the range of $1283-1284 in the early trade in the New York market on Thursday.

Those who have the courage to buy any weakness will be handsomely rewarded and history shows us it usually is in short order, Roy-Byrne stated.

The author goes on to claim that the projection shows Gold breaking past $1900 about 18 months from now. That would mark about three and a half years since the summer 2011 peak. After its peak in 1974, it took Gold three years to retest the high and three and a half years to make a new all time high.

Through yesterday, prices rebounded 8.4 % since reaching a 34-month low on June 28 as the decline spurred more buying of coins, bars and jewelry, a Bloomberg report said.

There are signs of firming demand from China to Japan, Barclays Plc wrote in a July 15 report.

Even though it is difficult to ascertain if Gold has already bottomed out or not, there are signs of a possible bottom at the current levels.

“Regardless, our gold stock bears chart illustrates that we are on the cusp of a major bottom. It may already be in or it could happen in a few weeks,” Roy-Byrne said at the Daily Gold report.


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