Zeev's Turnips Patch-No Politics (ZEEV)

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GOLDS

Sure, You'll notice spot gold has pulled back to major support off the 440 June highs, yet the XAU has not pulled back as far this time as the May low. Pull up a XAU monthly chart. Notice the XAU found major support in May and is still in its uptrend. You'll also see it has been consolidating bigger picture for over a year. With the XAU higher during this spot gold pullback, it makes it that much easier to breakout when spot gold rises. Notice the XAU is close to its Nov-July resistance trendline. Also notice the 20 50 and 200 dmas all verging here. The XAU stalled at its 200dma which is not surprising. Its held its 50dma here and looks like over the 95 will lead to a breakout not only over topping resistance, but trendline resistance as well. Hence the start of an EXPLOSIVE move. We'll see.

The main thing to remember is that with a higher spot gold price the gold companies can make much more money ramping up production. Earnings growth. At a 260 spot gold level it didn't make sense for them to produce. It does now. Like any business, the small caps will grow their earnings that much faster.