GoldMoney Alert - 10 June 2007

So Far, History Is Repeating

In the last alert I pondered whether gold's closing price on June 8th would prove to be an important low, repeating the experience from earlier this year when an important low was reached on two other Fridays - January 5th and March 2nd. So far history is indeed repeating.

The above charts clearly show that we're not out of the woods yet. But just as clearly, the precious metals withstood last week's onslaught and held support. More importantly, both metals are starting to turn higher. Gold climbed 1.4% last week, while silver jumped 1.8%. I expect more of the same in the coming week.

Watch $672 on gold and $13.78 on silver. Those levels are a stepping-stone to higher prices. When those levels are cleared, the probability will substantially increase that the lows in gold and silver are behind us. Those probabilities are rising anyway because of several key events last week, in particular:

• crude oil climbing back to the high $60's,
• the CRB Continuing Commodity Index ending the week at a new record high, and
• the report that U.S. consumer prices surged 0.7% in May.

Each of the above events provides a compelling reason to own gold and silver, but when taken together, they present a powerful case that the precious metals are the place to be.

Published by GoldMoney
Copyright © 2007. All rights reserved.
Edited by James Turk

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