2010 Gold Stock Boom

By Neil Charnock, GoldSeek

Gold has just breached US$1100 after a strong move following the purchase of 200 tonnes of gold bullion by the Reserve Bank of India from the International Monetary Fund.  This overhang had been troubling “ye of little faith” observers of gold.

The same day the Reserve Bank of Australia raised rates by 0.25% whereas many had factored in a 0.5% rise so the AUD temporarily dropped with the gold surge – and away went the gold stocks Down Under too.  Gold has been languishing in AUD terms as our currency strengthened over these past few months but I see some positive signs ahead.

I have drawn some corresponding lines and circles on the chart below and the largest circles mark the tops in the AUD gold price at almost $1,600.  There was negative divergence between price and RSI at this top and the reverse pattern has emerged over a period of many months now enforcing the power of these trend reversal signals.

Also note the MACD has now reached the “0” level and may shortly cross over which is also a positive signal. It is hard to see the $1200 rise on this chart but it is there and it could point the way to a solid AUD gold price rally ahead in the coming months.

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