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April 14, 2011 / Jeb

The U.S. Dollar and Gold, Silver and Precious Metals

Gold broke out of its 6 month consolidation and cup and handle pattern. The gold bulls are now in control and short covering should begin to cause an explosive move to my late January target of $1600 on gold and $40 on silver. In late January, gold and silver were in a sell-off and many were predicting lower prices as moving averages were broken. Now we are on our way to the January target in gold of $1600. Many ask what to do as they sit on hefty gains. I have learned through many years of studying the markets that the use of measured moves and technical targets when making a selling decision is quite important and must be followed. Institutional investors sell into strength at overhead resistance and are able to take profits. At those times of extreme optimism is when one must get worried and take some risk off the table. For some people it may be going off margin, for others it may mean raising cash. At times when technical targets are reached, risk management becomes crucial as the most difficult time to sell is when the consensus turns positive. Please stay tuned to daily bulletins on when technical targets are reached.

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