*Dow Theory Letters, by Richard Russell, May 8, 2008
“Everybody knows gold is in a head-and-shoulders break-down pattern. Below is a chart of weekly gold, and what do we see? Gold is about to test its red 40-week moving average. Note that MACD is very oversold, and at the very bottom of the chart we see the full stochastics at the level where preceding gold corrections have halted.
Gold remains in a long-term bull market. I view gold as my defense against a world that continues to pump out fiat paper money without stop. The unspoken motto of the central banks system is “Inflate or Die.” The central banks of the world decided long ago that the opposite of economic death is inflation. It’s only a matter of time before gold rises to new highs against the world’s fiat paper.”
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