Gold Fever

Today we saw Gold reach a new high largely on rumors of Gulf States entering into non dollar price agreements with BRIC countries. While the validity of that story remains in question, there is no doubt that the Dollar's reserve status is being called into question. Calls for an international reserve currency comprising a basket of currencies and, provocatively, a Gold component have Gold bugs salivating.



Gold

The chart everyone is humming about is Gold. As seens on its weekly chart below Gold has emerged from over a years of consolidation below the important $1000 mark. As a rule of thumb, the longer the consolidation the larger the pivotal move.





A cautionary note on Gold. First and foremost is it's behavior relative to the Stock Market. We expect Gold will trend with the general market. Specifically, a sell-off in the market is likely to coorespond with a sell-off in Gold as we saw in 2008. Considering the S&P 500 is over 55% off it's March low calls for a correction and even a crash should not be completely ignored. That said, the trend is our friend and we see clear evidence of a fresh uptrend in the making.



Today we spotlight two stocks poised to benefit from a runnup in Gold and Silver.

IAG

HL - Helca Mining




(click to enlarge images)