Buy Gold!

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"It is our contention that this breakout is the real deal. . ."

A few days ago, the price of gold broke out to a new high and we are delighted with this result. We were expecting an upward breakout in gold and it looks as though its price will now surge over the following months. Since the breakout occurred, gold has managed to stay above the previous high. The longer the price of gold stays above US$1,030, the greater the probability that the yellow metal will stage a spectacular rally until spring next year.

It is our contention that this breakout is the real deal and the pathetic action of the U.S. Dollar Index supports our view. Rather than rally, the American currency has embarked on another southbound journey and this is extremely bullish for gold. Also, the recent zoom in silver and precious metals mining stocks is further evidence that this breakout is not a head fake. Figure 1 highlights gold's recent breakout. As you will observe, gold's bull market has been punctuated by lengthy consolidations and this is the third time gold has broken out towards the end of the third calendar quarter.

Figure 1: Gold Is About to Shine!

Source: www.stockcharts.com

If history is any guide and the trend consistency is intact, this rally will continue until spring next year and we could see a 40%50% advance! Should this rally materialize, the mining stocks will go ballistic and silver will rocket above its previous bull-market high.

We suggest you hold on to your positions in the precious metals sector and add more capital.

The long wait is finally over and precious metals bulls are about to get rewarded! We plan to hold on to our positions for several months and will consider booking profits when we see an epic blow-off early next year.

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