Wednesday, February 12, 2014

Short Squeeze Set To Fuel Massive $400 Spike In Gold

"On the heels of a strong surge in gold, silver, and the stock market, today top Citi analyst Tom Fitzpatrick sent King World News an incredibly important chart which shows that gold may now be set for a massive advance.  Fitzpatrick also commented on what appears to be a developing short squeeze in gold.  Below is the all-important gold chart that all KWN readers around the world need to see, along with Fitzpatrick’s comments.

Fitzpatrick:  “The upside action in gold looks extremely constructive.  In fact, the way gold is trading here is looking very similar to the way gold traded in 2012, when gold posted the double bottom and moved higher....

“So the constructive dynamic here is that gold posted the double bottom around the $1,180 level.  We then saw the bullish weekly reversal.  Gold has now clearly broken out above the downtrend.  Gold is also above the 55-day moving average and heading toward the 200-day moving average, which is coming in at $1,306.

The gold market is picking up momentum.  If you go back to the similar move in 2012, it was at this point that the gold market began to accelerate to the upside, especially once gold broke above the 200-day moving average, which as I said is currently at $1,306.  What is most impressive here is how gold has continued to rally, even in the face of a strong bounce in the equity markets.

We are watching the area of the last high, which comes in around $1,362, but the most important level by far is going to be the $1,434 level.  This was the peak that was seen in gold during the bounce last year.  For us gold looks clearly set up to head in the direction of that major level at $1,434.


It will be incredibly important to see how gold acts if and when it gets up to that $1,434 level, whether or not gold can break it decisively and get a weekly close above the key area.  If we do get a weekly close on gold above $1,434, it would strongly suggest this move is going to take us significantly higher in gold -- possibly even to the area around $1,650 to $1,700.” (see chart above)..."


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