Finally! Wave 4 was a complex correction that lasted a few months. We got confirmation that it has ended when gold broke up and through downtrending resistance yesterday. We are now on our way to our target of $1350ish for wave 5.

What is really fascinating is that gold is doing this even though the dollar is sitting at elevated levels (currently slightly below 82 on the index). This is proof that gold is acting as a currency in its own right and is doing this even in the face of unprecedented manipulation and handling via the paper traded market (COMEX) and various derivative schemes designed to suppress the upward progression of gold.

Gold is honest money that has ZERO counter party risk (provided you maintain physical possession of it yourself). As such, it is the only currency on the planet that can make this claim. All other fiat currencies are structurally designed to have embedded counterparty risk attached to them. This fact is the KEY to understanding the importance of gold.

The Euro is still languishing, Greece is still in limbo, the problems in Portugal and Spain are still brewing. Those will probably be center stage soon. What isnt talked about much is the fact that the problems facing US states dwarf the problems being publicized in Euroland. And we have no credible plan to address them and certainly not the political will to do that which is necessary. When the light gets shined on the US’s problems and comparisons are made to the Euro problems, then and only then will the lightbulb go off in the minds of millions – and gold will run like you have never seen it run before (but, that is future still).

As we progress in wave 5, you want to book your profits by selling into strength. If you are a longer term buy and holder, you want to establish hedging positions to protect your gains by buying insurance as we approach $1350.