GOLD BREAKS OUT -- SILVER CLIMBS BACK OVER 5.00 -- GOLD AND SILVER STOCK LEADERS
GOLD STOCKS JUMP 4.8%... The price of gold bullion gained $7.30 today to close at 374. That's the highest close in three months. Today's price jump pushed gold through the upper line in a symmetrical triangle that has existed since February. That suggests that gold is starting a new upleg which should exceed the highs hit over the past year. The next major upside target is to the $400 level. Gold wasn't the only precious metal rallying today. Platinum gained $19 to hit a new multi-year high. Silver gained 13 cents to close near $5.15. Silver recently broke out to a three-year high and appears to be completing a major bottom. One of the factors in favor of higher gold prices is the recent action in gold shares. The Gold/Silver (XAU) Index recently broke out to a new multi-year high. Historically, gold shares usually break out before bullion does. It's no surpise therefore to see the price of precious metals following the shares higher.
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GOLD LEADERS... Barrick Gold hit a new 52-week high today. The daily chart shows the stock having recently broken through chart resistance at $19. The weekly chart shows ABX trading at the highest level since last July. The flat relative strength line along the bottom of Chart 3 shows that ABX has been a laggard in the gold group -- until the last month. Today's upside breakout suggests that ABX may be starting to play catch up to the rest of the group.
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SILVER LEADERS... Percentage-wise, two of the biggest gainers in the NYSE today were silver stocks. Hecla Mining hit another 52-week high after having recently achieved a bullish breakout through chart resistance at 6. Coeur D Alene is even more impressive. The silver stock soared to a new recovery high after recently achieving a bullish breakout at 2.5. The weekly volume bars since July are particularly impressive. The action in both stocks augurs well for rising silver prices.
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THERE'S ALWAYS A BULL MARKET SOMEWHERE... There's always a bull market somewhere. Our job is simply to find it. With bonds having peaked, and stocks stuck in the summer doldrums, there's one group that is clearly in a bull market. That's the precious metals group. Actually, that has been the case for the past three years, but it's only now starting to become more obvious. Although mining stocks have been rising for months, the commodities are just now starting to breakout. That's a good sign for both -- and for anyone who chooses to tag along for the ride.
