XAU update, see June blog.

xau oct8 2014

Individual gold stocks have not always followed the same path, ABX and are down but FN was, until recently still up, so we will use the XAU. As per the June blog we targeted the XAU to go to about 60 (it was at 104 at the time). There is at this point no reason to change that outlook. The triangle on which this prediction is based is pretty clear. Having said that it is also fairly clear that this sector as a whole has been crushed and it stands to reason that, using the hopelessly incorrect Keynesian view of economics, gold stocks should do well as other stocks sink. So there may be individual gold stocks that are approaching a good buy level, but generally this is not yet the case. Here is the big picture once again;

XAU Oct 8 2014 b

At a level slightly above 60 this index will start making a new low, which is to be expected if it is a C wave. Also the triangle measurement will be reached and time wise the upcoming low may occur right under the apex. We will stay with 60.

Obviously gold stocks are cheaper than then were at any time in the past 10 years but they are also more expensive than ever in the 1000 years before 2004.