As per previous posts, gold should target $1550 from here. Last night's break above $1330 was a critical step & there appears to be a confluence of factors that should drive much higher over the next 3-6 months imo.
Physical demand is strong. ETF selling dwindling. US debt ceiling issues on-going & likely downgrade of the US's sovereign rating.
This should be enough to get gold $200 higher imo. From there & this is the $64M question, does investment sentiment then turn & drive gold back through $1550 & target the previous highs. If the ETF net demand turns positive it's game on in my opinion. Combine that with new ETFs coming on stream in Asia & Russia to add to demand.
Curve balls as I see them.
QE is dumped because its simply not working. Gold would probably get initially sold off, however equity markets more so & I think gold would bounce back quickly & stronger.
US data improves, unlikely in the current environment of sovereign debt uncertainty.
The US agrees to face its debt problem by cutting more spending & raising taxes. Again a negative for equities & bullish for gold imo.
I have been trading in & out of gold stocks aggressively but I am looking to set & hold & ride this as I think we have just started a phase that will have multiple legs I may get in & out at times but will be far less willing to sell unless I se another screaming opportunity to capitalize on.
Well if Thursday is rally night, what was Tuesday (last night!) Could Thursday even be bigger & we crack on toward $1380?
