Gold is down sharply this morning and at 9:00 am Pacific time is currently trading at $1,170, just off its lows…the TSX Gold Index, after touching its record high of 395 yesterday, is currently at 363 after falling as low as 357 this morning…this reaction was not unexpected on our part as we have been warning about gold’s very overbought conditions for several days now…the Gold Index should find strong support in the 350-360 area, with additional strong support at 335 (the 100-day moving average)…as far as gold is concerned technically, it needs to hold above last week’s intra-day low of $1,136…if it falls below that, the next critical area of support would be around $1,080 where it needs to hold in order for this parabolic move to remain intact…the Venture Exchange, which is critical to watch, is still on solid technical ground and that confirms to us that gold’s current weakness is merely a much-needed correction to unwind overbought conditions…we expect gold’s next up-leg to kick in by early January at the latest with a move to at least $1,300 an ounce…
We strongly suggest accumulating quality juniors on any substantial weakness before Christmas as we anticipate a possible record move by the Venture Exchange in January, a massive advance in conjunction with precious metals that could be similar in magnitude to what occurred back in 1983 when the old Vancouver Stock Exchange jumped a whopping 50% that month…
Yes, indeed, we could be looking at 2,000 or better on the Venture Exchange by at least the end of the first quarter of 2010 and possibly even by the end of next month…PREPARE!
