Gold: 1100 in 3 weeks?

With oil hitting $82, it makes my year end prediction of $90 seem conservative. Nevertheless it confirms the breakout in gold, as is other commodities such as copper which is now over $3 again for the first time since this time last year. $90 on oil will be reached sooner than later at which time I will probably up the ante. For now we'll stay there. The Euro is now over 1.50 a whole $.08 from my year end target for that at 1.58. If the euro was to exceed my target I will not amend it because frankly, it doesn't matter. You either own gold, or you're everyone else.

$1200 is the target on gold. $1100 will be reached from what I believe will be 2 to 3 weeks. The reason for this is the dollar beginning to plummet faster than an "organized decline". These quick violent rallies will be short lived and are classic examples of a bear market. It has a few minor support points, but for the most part will be 74 in a very short period of time. Aside from that, has the gold market seemed rather quite to you recently? Just not as much buying action as you would think on some days? Just consolidating in between 1045 and 1070, kinda like it was as it broke out from 950 six weeks ago? And then again at 1000 in early October? Not to mention the lack of caring one way or the other that the miners have displayed recently, same as they were when this all started. Don't short a quite market. It's getting ready to move big again. The fact of the matter is, most people buying and trading gold, don't even know why there doing it! Ask them! The usual answer is "My financial adviser said I needed to be more diversified." Or "Cramer told me to buy Agnico Eagle. I don't know anything about the company but..." For them, it's just the same game with different players. These people have the attention span of a gnat, when gold stops performing, there on to something else. I can't tell you how many people I talk to who shake there head saying "Your right your right! Gold's gonna go crazy!" right up until the point where it stops for a few days and then there selling there gold shares for Yahoo. Frustrating, yes, but gold will always go crazy when everybody is frustrated with it, and when they least expect it.

Probably the best in technical analysis, Dan Norcini pointed out something a few days ago that I had also been telling people about. Gold has consolidated within a $25 range while the RSI has fallen into a downtrend, just as it did throughout September. When the downtrend was broken gold launched $40 upwards. When this trend is broken, gold will skyrocket sending it to $1100 easily. The first downtrend in the RSI was broken almost exactly 1 month after it began. The current downtrend has been in play for about 2 weeks. Very quickly people have become accustom to gold above $1000, $1100 will secure it's move higher and further the "ney-sayers" to continue their theory on the gold "bubble". These same people who reject the validity of a higher move in gold at $1000 will be buying like hell at $2000, they just don't know it yet.

The gears of monetary destruction grind faster and faster. Gains that took gold years to accomplish before will soon take weeks. Those that constantly look for a bubble where there is none will inadvertently create it themselves as they buy gold at astronomical prices. What was a "bad investment" at $1000 will be the only investment at $2000. The smart ones among us won't ask what the price of gold is, because we know that Gold is the price.

By year end it is as follows:
Gold=$1200/oz
Oil=$90/barrel
Euro=1.58
USD index= 72

If your buying Microsoft today because there earnings were so good and Windows 7 is going to be awesome... you've missed the point.

-Jonathan M. Mergott
Alchemy Financial Management