17 April 2009

Gold and silver are in a bull market and the Germans want theirs back!

" The story behind the scenes that captured my attention centered on German demands to return all their gold bullion held in custodial accounts on US soil. The deep source contact said something like, “the German demand is making the US bank nazis sweat bullets. Pressure on COMEX will get much worse.” Expect even more pressure on the June gold contract than was seen with the March gold contract, as far as delivery default is concerned. Deutsche Bank saved the COMEX bacon with a last minute 850,000 ounce delivery, courtesy of the Euro Central Bank at the eleventh hour. Such are the games not told on national financial networks, but which are central to Hat Trick Letter analysis.

The gold price is busy carving out the Right Side Handle to a messy Cup & Handle reversal pattern, one which is testing the patience of yellow metal investors. When the weekly stochastix cycles down a little farther, the consolidation should be at an end. We observe not so much a battle of monetary inflation versus asset deflation, as with free market pricing structures versus disruptive USGovt custodial management that will someday be chronicled as the most corrupt in modern history. Asian and Arab creditors to the USTreasury Bonds are not pleased with what the management of either the USGovt bond securities or gold, and they hold both in great volume. The target for gold remains almost 1300, with a breakout inevitable.

The silver chart looks even more bullish. Instead of a clear reversal pattern, it shows a recovery pattern that struggles to find strong footing on the less stable 20-week moving average. Its move to reach old highs will be easier, once near-term resistance is overcome. The 50% retracement of the long run from last October to February would paint a line at the 12.3 level for Fibonacci support. He was a friend of Botticelli, Lambourghini, Zepharelli, and great grandfather to Roubini, surely good company to keep. Look for an upcoming crossover of the 20-wk MA (in blue) above the 50-wk MA (in red), a powerful technical bullish signal for moves to approach the July and March 2008 highs. It is also inevitable."

Jim willie

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