Want to know the future of gold after it broke 700

With $700 gold again, excitement is building for this long-neglected metal even outside of the usual contrarian circles. Gold fundamentals remain overwhelmingly bullish, with world demand growth far outstripping supply growth. On top of this, we are entering the most bullish time of the year for gold. In autumn and winter huge seasonal gold buying out of Asia tends to drive powerful gold rallies.

This is great news that should drive the HUI considerably higher, but there is an even bigger development that has the potential to ignite this new gold upleg like rocket fuel. The US Dollar Index has now fallen under critical support at 80 and is approaching new all-time lows! Lower interest rates in the US will drive even more dollar selling, but the Fed has no choice since the stock markets, bond markets, and politicians are all pressuring it to cut rates.

So as the US dollar enters uncharted territory, dollar selling by foreign investors ranging from individuals to central banks should accelerate considerably. Some of this flight capital will naturally migrate into the ironclad safety of gold, the only currency that has survived all of human history. The current dollar slide is so technically ominous and important that it could very well drive the biggest gold upleg of this entire bull.

And while mainstream commentators will claim $700+ gold is really expensive, this isn’t really true in light of history. If you adjust the gold price for inflation by using the watered-down CPI, gold’s real 1980 highs in today’s 2007 dollars are now near $2300 per ounce. So going north of $700 or even $850 today isn’t a big deal and is highly likely given gold’s fundamentals and the dollar’s troubles.

At Zeal we have long been preparing for this next massive upleg in the HUI. As technical opportunities warrant, we have been aggressively adding elite gold and silver stocks carefully handpicked via extensive fundamental research. We rode massive uplegs 2, 4, and 6 to large realized profits for our subscribers, and we plan to do the same for the likely coming massive upleg 8. Subscribe today to our acclaimed monthly newsletter to mirror our trades and ride the next mighty surge higher in PM stocks!

The bottom line is the HUI is now technically in position to launch its next massive upleg, its fourth surge to new high levels scarcely yet imagined in this bull. If you run the HUI upleg cycle average gains off of the recent August interim lows, it yields incredible HUI targets ranging from 580 to 700! And such uplegs have only taken about 6 to 12 months to unfold in this bull, so if historic precedent proves prophetic we won’t have to wait long for legendary gains.

While the technicals alone are compelling, the unique position of gold today really ramps up the probabilities that the next major HUI upleg is imminent or already unfolding. Miners can’t keep pace with gold demand growth and the big autumn buying season is approaching. And all-time US dollar lows could drive gold investment demand the likes of which we haven’t seen in decades.



Adam Hamilton, CPA
September 14, 2007



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