Bullish Black&Yellow GOLD

I wrote last night how I would not be surprised to see Gold further its gains possibly towards $1400 this week based on the upward track in OIL and the downward path in the US dollar. I had to laugh early this morning watching the price of OIL fall towards $105, but by the end of the day we cannot argue whether OIL is bullish or not. Take a look at the daily price action today.

That daily pin on this chart signifies that the bulls are in control at the moment. The OIL price dipped early on in the day only to find buyers and ended up closing in the green. Very Bullish!

The US $ did fall further almost down to the even 82 handle with the Euro managing a close above 13220 and the Aussie closing above 9250, both levels which I had mentioned last night. We do need to pay attention to the CPI numbers due out of Australia this evening as well as China's Manufacturing PMI number. I cannot predict economic numbers but I would exercise caution this evening. If the number out of China comes in worse than the 48.7 expected, it could take the wind out of the sails of the global equity bulls for the short term. Watch closely the Cad as it is now perched above 97 and the Aussie which is trading around 9255 as I type this post. I'll have more on the currency markets tomorrow or perhaps later this evening if things start to get exciting.

As for GOLD, we were slightly negative for much of the day but towards the end of the day, we turned positive and closed above the resistance area at $1340. Very healthy at this point in time and I must say I am encouraged that GOLD managed to hold all of the gains from Sunday in Asia and all of yesterday, and adding to the those gains to close out the day. Here is a look at the daily chart on Gold

I am going to take something right off of Jim Sinclair's website because I feel it is a great illustration for what we may see in the near future. First I am going to copy and paste this
GOFO = Gold forward rates, the difference between cash gold and future gold.
Backwardation = Negative GOFO
Negative GOFO = When the nearby future gold price exceeds the spot future gold price.

And now, have a look at this, notice the last time GOLD was GOFO in 2008, I know I certainly remember that period of time and what was going on in GOLD. Now look at where we stand!

This chart may be the most important thing ever shared on the internet! With that being said, how can you not share it that questions where GOLD is headed in the future? Please share this post and my conviction with as many people as you can.

GOLD IS PRIMED TO MAKE HEADS SPIN!

Good Night
Martin