Christopher Aaron, Founder of iGold Advisor and Senior Editor at the Gold Eagle website, joins us to review his medium-term technical outlook on gold, the Dow:Gold ratio, silver, and the precious metals stocks. He is constructive based on the progress on the charts, but has some concerns over the next few months, as he sees a growing potential for a correction in the US equity markets that could take most sectors down. We review what he is watching as the Dow:Gold ratio continues to flatten out. In the near-term, he is expecting a little more upside in the PMs, followed by corrective move to let things cool down, before the next big impulse leg higher.
Christopher points out that on a historical basis, every time gold has broken out to new highs, it has back-tested the breakout pricing level, before moving even higher once again. Mining stocks tend to outperform in the later moves in precious metals bull markets, after the back-test of the breakout levels has occurred. We also look at the pricing action in silver, and GDX in relation to gold and in contrast to other prior bullish runs.
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