CDNX and Gold
It was a powerful and game-changing week for both Gold and the CDNX. Gold surged to a new all-time high today of $1,263.50, closing at $1,256.50. Its impressive technical momentum is certainly helping to drive prices higher. Fundamentally, concerns over currencies and debt are giving fuel to this price surge. And of course it doesn’t hurt that big central banks from emerging markets like China and India are buying Gold. A move to at least $1,300, perhaps even $1,350, in the short term is quite probable before some more consolidation. We’re not even close to a “bubble” in Gold yet as the general public still hasn’t jumped on the bandwagon and likely won’t for some time to come – they’ll pile in at the market top, as they usually do, and who knows where that could be ($2,000, $3,000?). A confirmed new uptrend is underway with the CDNX which gained 28 points this week to close at 1488. Volume picked up significantly today (121 million shares) which is another positive sign. After a 6-week decline, the CDNX 20-day moving average is now rising which is highly significant. The RSI has crossed over the 50% line which is also bullish. And the Chaikin Money Flow (CMF) indicator shows that buying pressure is getting stronger. All this tells us that the near-term target for the CDNX is around 1560 in the vicinity of the 50-day and 100-day moving averages.
