By: John Fisher – Chart from James Turk
Numerous records continue to be broken by gold, including some longstanding ones that go back to the January 1980 peak. Gold closed the month of May at a new record high against every major world currency except the Japanese yen.
Here is a long-term gold chart in terms of US dollars.
The important point of this chart is that gold is climbing in a major uptrend, which is denoted by the rising green trend line under gold’s price. Note too, that the deep 2008 correction following the Lehman Brothers collapse did not move gold back to the uptrend line, which is a clear sign of strength. Since its correction in 2008, gold has been moving away from the trend line. This development means that gold’s upside trajectory is accelerating, which is another sign of strength.
It is not difficult to understand why gold’s chart looks so powerful. The global monetary and banking system continues to unravel from too much debt, a large portion of which is of substandard quality. Also, the worsening sovereign debt crisis is highlighting the risks of all national currencies, while making clear the unrivaled safe haven attributes of gold.
All Things Considered – John’s Commentary
Action to take now: I have several clients and prospects that are waiting for a market retreat to either make their initial purchase, or add to their positions. They are either deciding to wait, or asking me what they should do. I have very little idea what gold or silver are going to do tomorrow, next week or next month. I do have very strong fundamental and technical support for what they will do in the next one to three years. That should be our focus. Market timing never works.
What to buy: Weight toward gold’s poor step child – silver. Silver is “poor man’s gold”. If people around the world begin to have a hard time affording gold, more money will flow into silver. Weight 2:1 or 3:1 in favor of gold over silver.
Quote of the day: “In the end, more than they wanted freedom, they wanted security.” – Edward Gibbon
