$Gold Weekly

The gold price is now trading at its 34-week EMA. I don't expect further declines, but the technical analysis says that we can expect a correction to satisfy a backtest of the prior breakout over a pennant @~$1600/oz. U.S. There is a major correction overdue in the markets set to unravel soon, there is no telling just how far this will take prices down.

What should follow from this time forward is a repetition of the same correction that occurred in 2005 - 2006, that the gold price will obtain an inflation-adjusted average @~$1800/oz. going forward.

This should serve as an average through the next major correction in gold prices prior to the third run-up in the gold bull market, the mania phase.

Once the mania collapse, then gold mining companies will benefit as they already have from higher average gold prices and overwhelming free cash flow.

supersize: http://www.flickr.com/photos/11747277@N07/6813065968/sizes/l/in/photostream/

stockcharts.com

-F6