I posted this on the Gold thread on 130609And then a follow up...

I posted this on the Gold thread on 130609

And then a follow up on the EVG thread 071109


Check the weekly chart for these periods:

17/03/2006 to 31/08/2007 --- approx 17 months.

23/11/2007 to 13/06/2009 --- approx 19 months.

Both chart formations are almost identical --- incredibly so ---

When Gold broke out of the former pattern in August 2007 it rose from $670 to $1000 a 50% increase.

The break out point from the current Inverse H&S would be about $970 -- a 50% increase on that price would be $1455 --- which is not dissimilar to some of the prices being put out there.

I am not saying when or if it will break --- but if you were a betting soul --- the odds could well be in favour of the bulls --- from both a fundamental and technical perspective.

The longer the pattern takes to break --- the bigger the move could be.



Now as of the 31/01/10 --- Check the weekly chart for these Correction periods:

09/11/07 to 07/12/07 --- 1 month

27/11/09 to 29/01/10 --- 2 months

In 2007 period the gold price corrected from 831 to 781 or 6%

In the late 09 early10 period the gold price corrected 1176 to 1080 or 8%

The big difference looking at a weekly chart is the MACD --- this time there has been a cross over ---- which is negative.



So what is going to happen? Well I have no idea ---- but there is still a continuing sameness to the weekly chart patterns.

There is still a convincing argument on the fundamental side that supports a much higher gold price ----- and the bears are now out in force pushing the case for a much lower price.

If EVG (or any other company) were producing successfully with cash costs in the $300s, I would begrudgingly accept forward sales ---- before that happens it would terrify me.

Anyway just some idle thoughts --- dont take them to seriously --- the general market looks crook to me as does the economic outlook.

For EVG it all depends on Las Lagunas -- we either do or we don't --- lets hope we do.


Regards Jim