The theory was that gold prices would drop to the 150-day moving average, before rising to new highs.
In his latest newsletter, Richard Russell says this outlook was too pessimistic. The consolidation period is over NOW.
Via King World News:
The latest action shows gold holding well ABOVE its 150-day MA and consolidating. Frankly, I thought gold was in for another test of its 150-day MA, but I may have been too pessimistic. Gold does not seem to want to test its MA (so far) this time, and that’s a bullish factor. As I write this morning June gold is up over 19 points, and there seems to be urgent buying in gold.
The big driver for a gold rally will be the Federal Reserve, which Russell predicts going into hyperdrive as soon as the stock market stops rising.
But more powerful than anything else will be the trend of the stock market. If the bull market dies here or even if it corrects severely, the pressure will fall heavily on the administration and the Congress.
For this reason, I expect the rest of the year 2011 to be “wild and wooly.” I expect government lies and propaganda to reach a crescendo. I’m bracing myself for a parade of surprises. Politicians love power and perks. But to keep those two, they must also keep their jobs. Therefore, coming up, I expect an extreme in dirty politics and internecine political battles. The year 2011 should wind up as a banner year for political and economic propaganda, all lies and bull-shit.”