The Daily Trading Report

Gold and Silver are getting ready to boom! Every factor   supporting higher precious metals prices is now in place.

• A bear market in the USD is confirmed. We expect a materially lower USD Index over the coming weeks/months;
  
• Commodities in general are bullish. The CRB CCI index is at multi-week highs;
  
• US Treasury markets have entered a bear market. The long dated US Treasury TLT is more or less trading at multi-week lows;
  
• Inflation protected US Treasuries (TIP) are now outperforming conventional US Treasuries (IEF). This suggests that the market is factoring an inflationary environment over the coming months (perhaps even years). Gold generally does well in an inflationary environment.
  

OK when will gold and silver break to new highs (above $1000 and $14.50 respectively)? Assuming that all the four factors discussed above remain in place (and we have no reason to believe that they will breakdown) we believe that the breakout in precious metals will happen sooner rather than later, if we are forced to put a date on it then we would have to say that it should occur within the next 6 months.

Note from the charts below the significance of the $1000 level in Gold……also note that the USD Index is looking precariously bearish trading a mere 1.2% above the last “support” of significance. The CCI is already trading at multi-week highs. Also note how the Gold Miners ETF “GDX” has made a multi-week high. Gold stocks have a unique way of anticipating the movement in gold itself…..