Gold Production and Reserves: Stage Two

Source:

...From a strategic perspective gold is in fine technical shape. It was just about a year ago that it launched from $650 into one of its most powerful uplegs bull to date that saw it briefly eclipse $1000 in March. And while gold seems to be exhibiting gut-wrenching volatility, it has been consolidating on the high side of this most recent upleg and is likely positioning itself to launch into a glorious new upleg that I suspect will surpass the early-2008 highs.

...From a strategic perspective gold is in fine technical shape. It was just about a year ago that it launched from $650 into one of its most powerful uplegs bull to date that saw it briefly eclipse $1000 in March. And while gold seems to be exhibiting gut-wrenching volatility, it has been consolidating on the high side of this most recent upleg and is likely positioning itself to launch into a glorious new upleg that I suspect will surpass the early-2008 highs.

While technicals are useful and give traders the opportunity to game the interim movements of this yellow metal, it is the core fundamentals that support the secular nature of gold’s bull. Gold is a commodity without equal and its myriad of fundamental drivers should continue to support a secular uptrend that is probably only near the halfway mark in duration. This is why after the carnage of summer it is vital to review the fundamentals that will continue to drive gold’s bull...

But though there are many fundamentals that do support gold going higher, the one that reigns superior is economics. Economics is the most fundamental of fundamentals and its principles are the cornerstone of all market trends...

When supply and demand are off kilter, the resulting economic imbalance has a near-term effect on prices that should appropriately adjust demand. Prices will either fall to grow demand or rise to decrease demand. And depending on how wide the gap is between supply and demand, prices can swing wildly in either direction in order to achieve an interim balance...

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe