Possible Precious Metal Short-term breakout Thursday, November 10, 2005

November 9, 2005
By Benjamin Train

Technically, gold may not be out of the woods yet, but its very close to a major move up. The rand and gold price is set to play a pivotal role on financial markets thursday. Platinum is trading at a 25-year peak

Gold mining stock charts, over the last couple of weeks have been frustrating, but if todays market action continues, we have crossed out of the near-term resistance areas and ready to make a major move up. Yes, it should move up tomorrow and Friday by giving the MACD an up bar for the week. I among others, do not yet have the confidence that a full active gold rally will develop without the 214.30 being fully tested.

Technical analysis of the price of gold and mining share prices have not been able to overcome their conflicting signals until this afternoon. This morning began with Gold higher overnight in Europe on strong physical demand. Investor demand pushed gold and silver prices to rebounded levels, even with a strong U.S. dollar position, on what was described as active spec or investor buying in the futures market.

Gold and silver stocks have been the lagging metals since they peaked in September 2005. The XAU/gold ratio has been in a weekly downtrend since then. That signal changed this morning and after the days market upturn, it continued to show gains after hours. Over the past two weeks, we have seen the XAU fall into its support zone of 97-102 and bounce back. This afternoon the support held.

We will have to see what the overnight action brings from London, but I am expecting a step up and strong close tomarrow afternoon. If morning futures are up, I will add to my gold mining stock positions with purchases in HMY, GG, NG, AU, AUY, ABX, and BGO. Keep your eyes on the support and trendlines. And the best of luck to all successful investors out there.