Commentary for September 6, 2007

| September 6, 2007

Two weeks ago, we noted the development of a slight positive divergence between the Gold Currency Index (GCI) and gold in US dollar terms, noting that it favored a breakout from the long-term trading channel from early this year. On Tuesday, both the GCI and gold broke above downtrend resistance, and today those breakouts were confirmed by strong moves higher on both daily charts.

We have entered the seasonally strong period for the gold market, so these breakouts are major bullish developments that likely signal the start of significant moves higher over the next several months.

Category: Commentary, Market Update

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