Gold and Silver Starting to Show Bullish Signs

We’ve believed that Gold would need to break $1100 before we thought a bottom could start to develop. While that could still be the case, we are starting to see building evidence that precious metals could be forming a bottom.
In the past we’ve written about the importance of Gold’s performance against other asset classes. Relative strength in Gold has preceded important bottoms in the Gold price during 2001, 2005 and 2008. That relative strength is starting to show. Below we plot Gold against various asset classes, which are noted in the chart. Several days ago Gold against foreign currencies (and the Euro) closed at a 15-month high. Gold has also moved to a 13-month high against Commodities. Also Gold may have bottomed against global equities as it has held support three times in 2014. Gold is weak only against the S&P 500.