Gold was being accumulated prior to recent upward thrust, thus recent move was genuine Richard Russell argues below. Also Richard’s biggest worry is the US Dollar, and he looks at its technical condition. This piece was done on June 20th, just after the big thrust up to a close over $1320 – Editor Money Talks

“Below I show gold along with its On-Balance-Volume at the top of the chart. Note that OBV tuned up before the big up-thrust last week. This tells me that the huge move in gold was not just a violent one-day short-covering panic, but gold was being accumulated prior to the up-thrust.

Following the big upward surge in the precious metals, I wanted to see whether it was a one-day short covering panic or whether we were seeing a continuation of the gold bull market. The daily chart below shows the action prior to the big surge which took gold above both of its moving averages.

Below we see HUI, the NYSE “gold bugs index.” Note that the pattern we see here is that of a huge head-and-shoulders bottom. The P&F target is 316. This formation has been building for many months, and thus when the latest surge arrived, the surge can hardly be seen as a sudden one-day short covering panic. If HUI can hit the 264 box, I expect an upward explosion.

The precious metals are still distrusted and even hated by the general public. Before this bull market is over, I expect to see a mad rush and melt-up as the pros and the public scramble headlong into gold and silver.

….also from Richard

The price of protein (meats, fish, beans, bacon and nine other proteins) is heading higher. Protein prices jumped 28% in the last five years. Protein prices jumped five percent in 2014. This according to Bloomberg.

Throughout the year 2014, I have advised my subscribers to do as I have done, and that is to load up with physical silver and gold. Gold is way up this year; better than many hedge funds have done. And sitting with physical silver and gold has been a lot easier on the nerves than sitting with a portfolio of assorted stocks. What will I do from here? I’ll sit with my silver and gold — along with my lone preferred stock — Tri Continental Preferred.

My biggest worry for the United States is our dollar. The dollar is part of almost every nation’s reserves. And as you can imagine, nations that hold dollars are on edge. They see the Fed pumping out trillions of new dollars, and they know that the more dollars — the weaker the dollar.

I’m not going to talk about the sanity of the Fed’s dollar creation, I’m just going to look at the technical condition of the dollar. The P&F chart below depicts the dollar. The dollar just hit the 79 box which set off a bear signal with a target of 73. Thus, the action of the dollar will be critical in the weeks ahead. As the dollar declines, it will put upside pressure on all commodities, and this, in turn, will put pressure on the middle class, which, from what I understand, needs food in order to survive.

Late Notes — The precious metals continue inching higher with gold closing up 3 to 1321 and silver up 13 cents to 21.04. Just to make things difficult, the gold miners backed off with GDXJ closing down 1.99 to 40.00. After looking over the charts, I continue to think that gold has made its lows and from here on it will take patience as the universe of precious metals slowly and subtly creeps higher. 

Gold has had a habit of declining every Friday, so this coming Friday’s action should provide a hint as to which way gold is going. In the meantime, China continues to be the world’s leading accumulator of gold in its long term strategy of preempting the dollar. From what I gather, China has now passed India as the worlds biggest accumulator of gold. China is famous for its patience and its long term strategies. I hope my subscribers enlist a bit of Chinese patience as they continue to accumulate silver and gold.”