$Gold Weekly

By now, the weekly analogy with the previous correction in 2005-2006 has completely fallen apart. What has begun to emerge is a major correction, since the price is nearly testing the 89-week EMA. Should the price test the 89-week EMA, or go below $1522/oz., then that would mean this rout should turn out to be the longest correction in the gold bull.

That completely changes the outward aspect of the gold price advance. Should the price decline only a little further in the enusing weeks, then likely it will bust several theories as to the gold price forecast.

Certainly this would raise a red flag on the gold eWave analysis. While the timing of the chart is well worked out, there is no guarantee that a strict mathematical proportion should be followed in this manner.

The price need merely fall below $1522 to dash both the eWave and the fractal analyses. I would say the fractal analysis is already busted, because of the recent decline. The lengthy correction can completely disqualify the timing.

Fractal analysis suggests a ~$7000/oz. + gold target, but the 3-wave must continue on its course instead of showing a major correction here. As you can see the three-wave may already be complete.

I still believe that gold is adjusting in its price for inflation according to shadowstats, and that an irony persists in the gold price, where it will first reflect the gold price fix so many years ago, but 100X that amount.

Gold miners made terrible investments after the crash of '29, though investors reaped the benefits of monster dividend yields after the U.S. dollar devaluation. Gold mining shares were fixed at par value by the exchanges after their collapse. (the exceptions to the rule were the larger miners that benefitted both from devaluation and confiscation)

Something very similar is happening now, where non dividend-yielding gold miners are having their share prices fixed by delta hedging strategies on trailing earnings. The biggest miners have seen major share price advances, though have fallen drastically behind gold. Dividend yielding miners with no growth are seeing their share prices trade perennially in the same range.

supersize: http://www.flickr.com/photos/11747277@N07/7203614254/sizes/l/in/photostream/

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-F6