Gold - Still Going Higher

Gold has been going up. What will happen when Congress resolves the debt ceiling issue? I suspect that it may come down some, but not by much. It will depend on the extent that austerity measures are included; I am not expecting a lot of meaningful cuts.

My sentiment is mere conjecture. So let's look at the gold chart. I do have a technical way of valuing gold.

My method:

Since gold can be viewed as a currency I plot the ratio between gold and the US Dollar in the middle panel of the chart. In the upper panel I chart the relative strength of the ratio. When we get a reading of around 80 on the upper panel gold is considered overbought; this has proven to be a good time to sell in the past. We are not there yet. Based on the chart we will continue to hold gold.

I might add and will address in the future that Silver and Gold Miner are a very different issues that require different evaluation methods.

(Click on chart for easier viewing)

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