GOLDRUNNERFRACTALANALYSIS.

COM "YOU AIN'T SEEN NOTHING, YET"

GOLD AND SILVER UPDATE: 09-08-12

GOLD SENTIMENT 1) Many PM investors are still on the defensive. They have been conditioned by the 3 fan-line formation for Gold that has presented as a long trading range in price. Many remain skeptical of Gold making a huge run, right now. 2) The COT numbers are getting a lot of attention in a negative way, but I doubt seriously those numbers have anything other than very short-term significance for Gold and for Silver. 3) Bullish individuals might be talking higher numbers, but for many that seems to be back to the old highs- then their enthusiasm wanes.

OUR EXPECTATIONS 1) Gold and Silver rise in price relative to the huge parabolic wave of Dollar Printing necessary to devalue the massive debt and to stave off a Deflationary Depression, thus creating Stagflation. 2) We have laid out our fractal price projections off of the late 70s Gold and Silver charts. At this point in the cycle Gold and Silver started huge moves with little overhead horizontal resistance, and there was no pussy footing around as price took off. 3) Our price pattern analysis per the Models 3 fan-line formation is still tracking very nicely, and it suggests that we are in a momentum run for Gold and Silver which will take both chopping straight back up to new highs before a parabolic run in price. 4) The Fundamentals for Gold and for Silver appear to be in-line with our expectations in terms of a momentum run to be supported and led by

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those who have managed Gold and Silver from rising aggressively up to this point in the cycle. 5) Our approach is a sound and simple one as we lay out price projection potentials based on the historical fractal model, track those price potentials by tracking the 3 fan-line Model, lay out the necessary price slopes that need to be maintained to achieve the historical fractal price projections, and monitor current price and TA Indicator movements compared to all of the above. This approach gives us a more comprehensive means of evaluating the current price moves for Gold and for Silver by keeping our personal emotions of fear and greed out of the equation. 6) Our old tracking charts for Gold and the Models 3 fan -line formations are getting a bit cluttered so well continue to follow the old charts while adding new ones to consider new moves without changing our basic view. 7) There are some differences in the two 3 fan-line formations, but nothing is perfect in life. THE OLD 3 FAN-LINE CHARTS Golds 3 fan-line formation is stronger than our Model with the daily RSI overbought at 80. Gold blew through the middle red resistance line last week to the light blue resistance arrow, opening up a potential move to the top red resistance line before a short-term correction takes place. We are adding a new black angled line top mark to the chart, BUT I am going to place it above price at the top red resistance line for now. I expect a spike up into that area, much like the Model suggests. I also added a horizontal black dotted line above the MACD. The Model shows a rise above that line on this run. I suspect Gold will spike up to the top red resistance line, before a short-term correction materializes. The new price high on the chart is confirmed by increased volume and a higher RSI and MACD readings.

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3 fan-line Model chart to match the above chart, next. Black marks added.
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As a quick review, there is a decent chance that Gold will spike up to the top red resistance line before seeing a short-term correction. Thus, we have added a top black angled line, but up at the points on price, the RSI, and the MACD where the Model saw tops. This is all just ultra, short-term stuff as we track price versus the Model. We expect this run to be huge so risking short-term

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trading of Gold and Silver at this time seems high risk/ low reward- yet, many have been conditioned to trade at this time. THE NEW GOLD 3 FAN-LINE CHART The new daily Gold 3 fan-line chart shows 2 potential rising price channels in blue and in red. On the BGO Model, above, you can see a gray line rising under price as Gold rose up to the top red resistance line. From there, price corrected, and then ran back up under that line. If we see the same price action versus the lower line of the red rising channel, we could still see Gold reach new highs within 6 weeks. It is a bit early to try to develop a true channel, now, but we want to get a feel for the current slope of rise for Gold to compare with our forward looking price objectives. The red channel lines in 2011s 5th wave run and for todays Gold price run, are of equal slopes. The burnt orange zone is analogous to where the BGO Model rose to the top red resistance line, corrected, and then chopped higher before running up to the purple dotted arrow horizontal resistance line. So far, Golds move appears on track with the Model, and with the slope of the 5th wave rise in 2011 that would be conducive to suggest the kinds of potential prices we expect for Gold into 2013. In the yellow shaded areas, below, we can see similar moves and readings in the MACD, the ADX, and the Stochastic indicator compared to the 2011 sharp move higher. We much prefer to see these combination similarities to the 5th wave run in 2011 suggesting everything is technically on track for a similar momentum move by Gold to new highs. The overbought Stochastic Indicator is the same as the ADX Line rising- telling us that the rising MACD is indicating a momentum move is in progress on the daily chart. This is a daily chart which is less important than the weekly at this time, but the daily momentum confirmation must come before a weekly one can. Again, this is a good sign that all things are go for Gold. For this 3 fan-line formation, the main resistance is overcome once the top fan-line is taken out. Only minor horizontal resistance remains at the top red resistance line, and the burnt orange zone. After that, in terms of chart resistance it is blue skies ahead with only angled ray minor resistance above.
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Next up is weekly log channel Gold showing the burnt orange zone and a price channel similar to the blue one on the daily chart. The weekly chart is dominant

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for Gold in this period, and we see similarities for the MACD, ADX Line, and the Stochastic Indicator to the 5th wave move back in August of 2007.

On the above chart we can see the red angled resistance line that will probably
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create a short-term top for Gold up around $1800. The angled purple lines will likely serve as buffer zone of short-term resistance at new highs. THE SILVER CHARTS The first chart is the historical left-angled weekly cup formation for Silver. You dont often see an RSI run straight up from the 30 line to 70 on a weekly chart. This is great relative strength we are seeing for Silver. I suspect that an RSI reading of 70 will signal a short-term top.

In the next chart we can see that Silver is moving out of the moving average ribbon band, removing more chart resistance. A short-term top and re-test will likely come when the weekly MACD hits the zero line while the RSI hits 70.

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The next chart is the daily chart of SLV, the Silver ETF. Just ignore the dotted line with the green circles to the right. We can see two dotted directional lines rising above price. These lines are the slopes of the 3rd and 5th waves of the move up into 2011 and can be used to judge the potential of strength in the price rise compared to our price projection requirements. So far, price is rising much closer to the higher angled 5th wave line slope in green which suggests a higher price run potential. We would not expect that to continue exactly, but it generally shows us the potential to achieve our higher price objectives. Price has broken above the red dotted resistance life of this apparent flag formation- the main resistance of the chart formation. That break suggests a rise up to the blue channel top. How fast price gets there will tell us if the blue channel top will be broken in 2013 as the fractal late 70s suggest.
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CONCLUSION 1) Things look very strong both fundamentally and technically for Gold and Silver at this time. 2) The 3 fan-line formation break can be explosive since the main formation resistance is broken along with the top fan-line. 3) The current similar progressive price and indicator comparisons to the Model adds to our confidence for a huge move for Gold and Silver like we expect per the fractal work off of the late 70s Gold chart. In fact, the Gold chart formation is stronger than the Model we are comparing to. 4) We have noted in the past, the minor differences in the two 3 fan-line formations which raised the question of whether the next short-term correction would come from the level of the middle red resistance line or
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the top red resistance line. Gold blew through the middle red resistance line last week, suggesting we will see a short-term top up at the top red resistance line, thus adding to the strength of this price move. 5) The faster and more directly we get up to and through the old highs, the higher potential price objectives are created for this current run into 2013. So far, the moves through resistance appear to mimic our highest expectations. 6) Ultimately, the Gold and Silver Stock pricing will be driven by the higher pricing for Silver and Gold. Gold and Silver Stock sentiment is still in the gutter, and the sharp price increases for Gold and Silver that are unfolding should light a fire under the Gold and Silver Stocks that mostly still lie well below their old highs I a depressed state. The fractal work for the PM Stocks off the late 70s, suggests that we are very early in the first of 3 ever-increasing price waves higher for the Gold and Silver Stocks. 7) Most importantly, we have reached the point in the cycle per the late 70s fractal work where Gold chopped up to its log channel top, and then rocketed out of its log channel going parabolic on the log chart. This is the point in the cycle where the Fed, the Feds Banks, and other Central Banks turned from Gold price management to active Gold price support to help drive the price of Gold vastly higher. If so, then we have reached the point in the cycle where the Fed now must greatly accelerate the devaluation of the Dollar to devalue the debt and start the real process of driving the price of Gold higher to balance the US balance sheet. With that said, we are likely approaching a short-term top for Gold and Silver. For the moment, Goldrunner Saturday 09-08-12 GOLDRUNNER44@AOL.COM

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Please understand that the above is just the opinion of a small fish in a large sea. None of the above is intended as investment advice, but merely an opinion of the potential of what might be. Simply put: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. In the interest of full disclosure, GOLDRUNNER is personally invested in the Precious Metals sector including various Precious Metals and other individual stocks. GOLDRUNNER reserves the right to modify or eliminate any or all positions at any point in time.

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