After the Silver post the inquiries regarding Gold have flooded in … so, in part 1 we’ll take a look at the Gold/Silver Index. The $XAU is the Philidelphia Gold/Silver Index and consists of 16 precious metal mining companies. This index and the $BUGS are the two most watched precious metal indices in the world. The index and the spot prices of Gold and Silver have moved in sync, nicely at the low in 2008 and mostly on the way up and down. The interesting aspect to look at is the lag in the spot gold price once the index had reached it’s target …this is what I’m looking at for a reference point. As you can see, the recent low in/around 82 was a very strong harmonic target and fits nicely into a potential big low for the index. However, when we show spot Gold in part 2 we have the potential (which would fit nicely into our preferred sequence of events) for the Spot Gold to turn in/around here for one more low. I would like to see the $XAU consolidate/pause/bounce around the recent lows while gold finishes one final leg before beginning a POTENTIALLY explosive BULL MOVE. Stay tuned and enjoy the charts … again, know nothing about the fundamentals of the Gold metal or the 16 companies just following the bouncing ball of patterns that can make very nice entries to manage risk possible.
Will update the Spot Gold chart later this afternoon or tomorrow … back to mowing the grass.