Gold set for move higher 8-27-08

In the last update on Friday I put up a chart of gold which had a potential inverted head and shoulders formation developing. Almost exactly like I had predicted we are in the midst of completing a right shoulder right now. We retested the lows that were reached during the formation of the left shoulder (805 area). I had mentioned that if a bounce were to occur from there I would be buying gold stocks. Yesterday we hit those lows in overnight trading and then we saw a huge $20+ rally off the lows. The neckline is right around the $840 level, I anticipate us breaking through very shortly and a rally to the $900 level should occur.

In the last update I also mentioned that oil was putting a bottom in and natural gas as well. Since the last post was written there has been a lot of movement in the energy markets. There has also been a lot of talk about hurricane Gustov and the potential that it could turn into a category 4 storm by the time it reaches land in the gulf of Mexico. This threat will certainly escalate the energy prices since a great deal of oil and gas rigs are pumping in the gulf. As I write this morning we are up about $2 in oil and 40 cents in Natural Gas. I can see the rising energy prices putting a damper on the main markets as they have done in the past ,and send the Dow and S&P down the toilet.