Gold has been on a short crushing bullish run since the first of July.  A technical dip below the 50-day simple moving average in mid June triggered many traders to go short. This was a particularly strong signal being that it was the first time the 50-day moving average broke since January. However, the bearish jubilation was short lived as gold price just dipped to the 1478/oz level prior to bursting to all time highs in the 1602/oz area. While gold is obviously in a long term bullish trend, what has triggered the acceleration to the upside?

International debt problems are the prime culprit for the sharp increase in gold prices. With both the U.S. and Europe teetering on the brink of debt default, traditional safe havens such as the U.S. dollar have shrunk in appeal to investors. The only thing left that feels secure is hard assets with gold topping the list.

Is it possible that this run is the final move higher for gold prior to a prolonged bearish trend? Some technical traders are calling this rapid move higher a blow-off top. This refers to a final frenzy of buying that often occurs right before the trend changes. This appears very likely, if history is any guide. Kitco’s senior metal analyst Jon Nadler agrees, as he explained to the Associated Press, “Much of that demand has been from speculative investors, such as hedge funds.  Gold could plunge — if investors regain their confidence that the U.S. won’t default and that the 27-nation European Union won’t be threatened by the region’s debt problems.”

I wish this was all about the man on the street, pension funds, but it’s not. It’s the type of player that tends to get up at the very next opportunity to find something hot elsewhere. Will all this end in tears? Quite likely yes, because I see that the demise of the European Union and the United States as a debt entity is really not in the cards.”

I concur with Mr. Nadler, believing the end is very close for the bullish gold trend. However many disagree believing gold will push the $2000/oz prior to any substantial pullbacks.

If you remain bullish on gold, but don’t want to purchase the futures or gold directly, what’s the best course of action?  Traders can look at the gold miners such as Yamana Gold (NYSE: AUY), Goldcorp (NYSE: GG) and Barrick Gold (NYSE: ABX) .

About BeaconEquity.com

BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

Beacon Equity Group Disclaimer

This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Beaconequity.com is a wholly-owned subsidiary of BlueWave Advisors.

While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.