Toby Connor: If you aren’t already in, Monday or Tuesday should represent an exceptional buying opportunity as gold moves into its final intermediate cycle bottom.
Now that the 38% retracement has been breached I would look for a final exhaustion move to test the 50% level early next week as we move into the elections.
At that point sentiment should be completely washed out and gold will be set up for an explosive move to test the all-time highs by the end of the year or early January.
Miners (NYSEARCA:GDX) should deliver even bigger gains as I expect them to break out of the bull flag that’s been forming over the last 4 weeks and generate a 25-30% rally to test their all-time highs.
We are moving into one of those rare buying opportunities that only come around once or twice a year. This is that point I warned about in my last post where one has to ignore the media and nonsense about QE3 not working. It is going to work, and it is going to work extremely well. I fully expect it to drive gold to $4000 by mid 2014.
This is purely a profit taking event, nothing more. These situations happen like clock work about every 20-25 weeks, as you can see in the chart below. Gold is now very late in the timing band for that major cycle bottom.
I’ll have more in the weekend report and I think the odds are very high we get a final bottom by mid week. GET A FREE TREND ANALYSIS FOR ANY STOCK HERE!
Related Tickers: SPDR Gold Trust (NYSEARCA:GLD), iShares Silver Trust (NYSEARCA:SLV), Market Vectors Gold Miners ETF (NYSEARCA:GDX), Goldcorp Inc. (NYSE:GG), Barrick Gold Corporation (NYSE:ABX), Kinross Gold (NYSE:KGC), Yamana Gold (NYSE:AUY).
Toby Connor is the author of Gold Scents, a financial blog with a special emphasis on the gold secular bull market. Mr. Connor’s analysis skill of the markets is largely self-taught, though he admits to being an avid reader of Richard Russell and Jim Rogers, among several others.