Dear CIGAs,

The following are the monthly charts of gold, both in nominal terms and in inflation-adjusted terms (this is using the government’s numbers which we all know are next to useless but for charting purposes have their place.) I have included today’s price in the charts to give you a feel for where we will be if gold can maintain its footing above the $1200 level by month’s end. As you can see from the inflation adjusted chart, the $1200 level is quite significant which is why a battle is raging around it. Based on this inflation adjusted chart, a move above this level will put gold solidly above all of the major Fibonacci retracement levels associated with its monthly closing price. That would set it up for a run to near the $1,590 – $1,600 level which is not all that far off from Jim’s $1,650 number.

Trader Dan

Click charts to enlarge in PDF format