What a terrific start to the year for gold!
When you see a breakout to new highs on the 1st trading day of the year like this for a commodity it normally signals further strong gains as the year continues.
Bearing in mind that this strong gain was, of course, largely fuelled by dollar weakness, it is important that we keep one foot on the ground by referring to the gold chart in Euros. However, gold bugs will find the gold in Euros chart to be an additional source of good cheer, as gold also rose to new highs against the Euro. This is a very positive development that augers well for a strong year for gold, and is not so surprising when you stop to think that the money supply in Europe and most other countries is also expanding at a rapid rate - only 2 or 3 weeks ago the European central banks created a cool $500 billion out of nowhere to prop up ailing banks - they are starting to learn the game from the Fed.
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is an English technical analyst, holding a diploma from the Society
of Technical Analysts, Cambridge, England. He lives in Chile.
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