Last October I’ve started noticing some positive developments in gold just when stocks started to correct into Christmas eve’s bottom, see Rotation to gold and miners?. Since then it’s been firming up for possibly something bigger.

I’m not one of those gold bugs who’ve been advising to hold gold in the past almost 10 year long bear market. I don’t believe in some idealistic ideas with potentially huge opportunity costs. But when I see a good opportunity I try to grab it with both hands.

Here is a weekly chart of gold.

As I mentioned on a few occasions before the line in the sand is $1,400 level. It seems as this time could be the time when we could see a breakout.

Especially in case if USD would weaken over time. I still can’t say for sure which way the currency markets will resolve, but one thing is definite. Volatility should increase sooner rather than later. And if USD can’t use the current environment to appreciate, see Dollar about to rally?, this could become a great tailwind for gold!

There are quite a few individual miner names that are showing great potential for growth. Contact me if you wish to discuss them.

ChartingTrades.com is a blog of CT Capital Ltd.

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commodities, fx

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