Eric Muschinski: Gold Breakout Above $1400 Coming in Next Two Months
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Eric was a broker and involved with hedge funds for sixteen years. In 2011 he decided to focus exclusively on the pulse of the resource sector which is when he launched the “Gold Investment Letter.”
He discusses commodity ratios and how we are back at 1971 levels. Things are quite cheap right now, and there is lots of upside. We are positioned very well after such a blistering bear market. From a duration and severity perspective, it was the worst bear market in history. After an extreme bear market, you tend to have an extreme bull market.
We are seeing a flagging triangle pattern in the minors, in the next couple of months we should see a breakout. Gold is testing the highs, and there is no doubt in his mind that we are going to break out of the 1350 level. This is a big deal because every institution and speculator will likely recognize it as a breakout. When this happened in 2011, it only took nine months to hit the 1900 level.
It’s quite natural for people to feel burnt out and lethargic when it comes to the resource sector and while it’s been frustrating it’s important not to focus on the past. You need to pay attention and be aware. When you see the trend broken its time to put some money in and let things ride.
The fundamentals show that gold has done its job as an inflation hedge and that it does well over long periods of time. He discusses several resource plays.