Are we there?

06/10/2010 by Philinje.

Gold and silver moved strongly up yesterday and gold hit our target of $1350 from the inverse head and shoulders formation. Though by some measures the target is $1400 or $1420. Could it go farther from here? Sure.

Mining shares have broken through their all-time high from March 08, finally, as of yesterday. Silver is definitely there now - it’s already a dollar past that. So, many signs are looking good.

However, the dollar has broken below 78 and the Euro is at 1.39. We are due for a reversal in the dollar and that could happen when the Euro hits 1.40, which could be later today. So extreme caution is warranted here.

Silver is looking parabolic. It might keep going but its climb is getting awfully steep. Gold is not as steep but getting there. When silver reverses, it could fall sharply. So be extremely cautious with silver.

And are equities really as healthy as they seem? We could be getting to a local top or maybe the rally will keep going. No one seems to know. It’s been like this for more than a year - completely divergent views co-exist and both sides seem reasonable. So who knows.

Mortgages apparently evaporated in a legal ruling recently, and people like Jim Sinclair think that is one more reason the financial system will blow up. Housing is till in the dumps, unemployment is still high - but corporate earnings are through the roof. It’s a weird world.

Hang on to your sanity, and hang onto your gold! One thing that seems sure is even if gold does decline, it won’t drop that far. So at most it will offer a good point of entry for some people.

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