By Relmor Demitrius

Yamana Gold Inc.(NYSE:AUY) and other miners are feeling the effects of record gold prices.  Due to extreme market conditions in 2008, Yamana Gold has fallen short of its own high, trading near $11.25 today, but had traded as high as $14 in December of 2009.  Will Yamana Gold and other miners see another explosion back to extremely bullish prices?

Strong gold prices have been providing an excellent over $10 base on shares of AUY.  I am bullish on this equity anytime its trading strong over the $10 line.  Checking the charts we can see strong support in this area and a recent gap up and hold has given reason for investors in AMEX:HUI and NYSE:GDX companies to have hope of an early summer breakout.  The higher AUY trades, the more attune to market sentiment it will trade.  Is the NYSE:GLD a better play here?  When is spot gold due for a pull back?  All equities can be sold regardless of strength of sector in market pullbacks and gold miner shares are certainly no exception.  With price ranges from $18 to $4 during the 2008 blow off top to the sinking lows of the dreaded March of 2009 area, fear buying into shares of gold miners hasn’t always been the driving force in this equities accumulation pattern.  As gold prices rise, because of a base of support due to somewhat static costs versus increase in the product selling price, so does Yamana Gold’s abilities to generate profits.  The costs to mine gold do increase as oil prices increase and labor costs due to foreign exchange rates vary, but if the underlying product increases at a higher percentage than the increase in costs, additional profits are available.

With gold prices reaching record highs of over 1200 dollars an ounce, expanded revenue for unhedged miners are sure to follow.  I expect Q2 numbers in revenue in Yamana to have an increase due to this gold surge.  The percentage increase from $800 to $1000 isn’t as great as from $1000 to $1200, but most of this added value comes with less and less costs attached to the higher price.  Why do costs increase as gold increases?  Well it doesn’t necessarily, but when gold increases certain economic conditions are usually in play that increase gold miners costs of production of the metal.  These include mining countries with a strong local currency or having the falling dollar cause a rise in oil prices.  These are a few conditions that high gold prices can affect the cost side of business. (more…)

By Relmor Demitrius

SPDR Gold Shares (NYSE:GLD) in the last two trading days had climbed almost 3%, to $118.27 (this reflects a spot price equivalent of around $1,182.70 an ounce) at close on Friday.  Fears of a European financial meltdown brought on by weakness with their smaller members such as Greece, Spain, and Portugal combined with a falling stock market, drove buyers into gold last week.  Even after the GLD closed trading, a late day surge saw spot gold go from around 1,180 dollars an ounce to a near record high of 1,208 dollars an ounce, at the time New York COMEX ceased trading on Friday.

Last month I wrote an article predicting a sizeable breakout in gold to happen around the 20th of May.  It seems the gold breakout came early on Greece news, creating fear buying.  On my Chart 1, I showed the coming together of two long term trend lines around the 20th of May.  As you can see from the circled breakout from early September on Chart 1, that move also had an early breakout, so this should not be surprising, as May 20th was more of a deadline for this move, rather than a prediction on the exact day of its occurrence.  A strong qualification of a valid resistance break is that it occurs on high volume.  As indicated on Chart 2 this break does indeed have higher than usual volume. (more…)

Spot Gold has climbed steadily since 22 December 2009 low of $1075/oz. Gold had declined about $150 since the early December peak at $1225/oz. The decline was due to fear of Dubai debt and profit taking as a correction was due. As mentioned in my previous article, Abu Dhabi stepped into rescue and provided Dubai with a huge $10 bln bailout.

Now moving over to Gold’s technical outlook, little has changed since my last update. My buy zone of 1100-1125 was very decent considering the bottom being $25 away. So now what is the big questionon everyones mind? It is obviously confusing if we look at technical patterns and compare it with seasonal patterns. Technically the current pattern is supposed to be bearish – A sharp dip followed by a fake rally with another down move.

However, seasonal patterns show us the complete opposite. Historically the month of January has been a very sideways month for Gold with February and March being extremely bullish. Considering this pattern to occur again Gold could easily surpass $1200 and challenge $1300 by March.

The seasonal pattern has the bias over technical pattern because fundamentals are more stronger than technicals. Also, after the great performance of Gold last year and gaining popularity as the next bull market, there would be many huge portfolios being adjusted with more weight given to Gold.

Looking at the Chart now, Wave IV met its end at $1075 on 22 December last year. We are now in the early stages of wave V and the rally should be accelerating next week or early February. Those who are in buy from my suggested buy zone should move their stops to 1100 since any move below 1100 could open up the way to the previous all time high of 1030. Another interesting fact here is that the length of wave A) is equal to wave C) which increases the confidence in this count.

Summing up, Gold is bullish above 1100 and we are in the early stages of a massive Wave V. Moving above 1180 would certainly bring momentum back in this market and Gold will shine yet again.

By Hardeek Patni -

Spot Gold jumped off the cliff on December 4, 2009 with a $65 single day fall yet again. It gave up about two weeks’ gain in a matter of 3 days leading to confusion and chaos in the market. Many traders must be questioning themselves – Is this IT? Has the bubble burst? Do I sell now? I say NO we are not there yet. The bubble has not burst and its time to buy not sell. There is a lot of fear in the market at this point since the Dubai World news.

One thing most of us need to know is that the Abu Dhabi (capital of U.A.E) government is ready to support most of the Dubai debt. Investors need to calm down because over the span of 6 months the situation will be better in Dubai. The sell off in Gold due to the Dubai crisis shows the panic in markets. There is an old saying: the best time to invest in a market is when panic and fear are at a high.

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