All of the pieces have fallen into place.
Gold was near a 27 year high, oil was at a record high, stocks in the U.S. and globally remained bullish, the currencies were strong and the U.S. dollar was near a record low. The Fed then lowered the Fed Funds and Discount rates by a half percent on Tuesday, which triggered or reinforced strong breakouts in these markets, leaving no question that the major market trends are solid and strong.
The Fed saved the day. A recession is now less likely than it was a month ago, while inflation is indeed more likely. As a result, oil continues its surge and gold broke out strongly to a new bull market high. Stocks are super strong, interest rates are on the decline, the U.S. dollar is at a record low, the Canadian dollar reached a 30 year high, the euro is at another new high, many resource and energy shares are also at new highs, and so are several gold shares. The asset boom continues (see Chart).
Gold: What's Next?
A strong C rise in the gold price is now underway. These are the strongest upmoves within gold's recurring cycle. Plus, the fact that gold has now reached a new bull market high is super bullish for gold, reinforcing that the over six year old bull market is solid and well intact. With gold above its May, 2006 high (which was the last C rise peak), gold is now on its way to test the 1980 peak near $850 as its next upside target. Gold's C rise will remain super strong above $700 basis December.
Gold shares are also shooting up with gold. The XAU index is very strong above 150 and it's now above its May, 06 high near 168.50. It'll be very strong if it can stay above this level.
Gold and oil are in the limelight and they've left the others in the dust. Yet silver, platinum and copper are on the rise and they are firm above $12.70, $1290 and $3.40, respectively, and they have room to rise further.
Our strongest gold and energy shares are at new highs, while most of our natural resource shares are at new highs. This is a time to be buying new positions and holding on to the ones you have. The best is yet to come.
