More Bull Market Confirmations

Gold closed in New York on Friday, March 31st, at $581.80. It was gold's highest monthly closing price since December 1980.

More importantly, basis its monthly close, gold is breaking out of the trading range which has confined it since reaching its all-time high in January 1980. This breakout can be seen on the following chart.

Gold's closing price on January 31, 1980 was $681.50. That's only $99.70, or 17.1% from its current price.

What's more, gold's all-time closing high of $825.50, reached January 21, 1980, is well within reach. In Q1 2006 gold recorded a 12.5% gain. If that rate of appreciation continues, gold will be at that all-time high by the end of this year.

Silver continues to rocket higher as well. It closed on March 31st at $11.48. That's silver's highest weekly close since September 23, 1983.

This chart shows that silver continues to build a base of accumulation. This base is being formed within the two green lines.

Of particular importance is silver's breakout from the pennant formation. Silver is rocketing higher out of that pennant, and as a consequence, silver is outperforming gold. Their ratio is falling, as can be seen on the following chart:

Markets are never a one-way street. Even bull markets have corrections, and one could start in the precious metals at any time. However, until it happens, assume that both gold and silver will head higher. And when we finally do get a correction, view it for what it really is - just another buying opportunity because this bull market in gold and silver is still young.

Published by GoldMoney
Copyright © 2006. All rights reserved.
Edited by James Turk, alert@goldmoney.com

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