WWW.CHIEFSWORLD.

TK

Gold Monthly Report April (March 28 2010)

It has been a while since I’ve documented a long term outlook for gold and produced a monthly report.
When taking on the challenge of a short, medium and long term outlook and providing analysis of each
on a website,(www.chiefsworld.tk) I never realized how much required time it would take. Just the
research and concentration time required to conclude to the best of your ability the most likely route
the gold market is about to follow on the short, medium and long term is very time consuming. To put it
together in a readable format with charts and to make it understandable to other readers is a daunting
task that takes up more time that I wish to admit. There are just so many variables that must be
considered that is an almost endless task of continually going back and looking and relooking to see if
anything has changed and documenting it. There are a few important points we made in the January
monthly report that is worth mentioning for investors and traders some 90 days ago. They are listed
below –from January 4th

1) The most likely thing we see right now would be for gold to mount a rally
from either the 1075 area this year or the 975-1000 area. We think a move
to the 200 day moving average this year would be a good opportunity to add
to positions or initiate new ones.

2) The most likely development is a mid winter high, a pullback to spring, a

rally to memorial day, and a pullback to the July - September timeframe.
This is what usually develops.

3) IT is usually good to not be FULLY VESTED this time of the year in GOLD.
Mid February/March is usually a good time to be lighter than heavier. Late
summer is usually good to be heavy.

So far things have played out well. Gold has bottomed twice at the 1075 area (December and
January) and once at 1044 in February. Whether we get a move to the 975-1000 area remains
to be seen. We’ve also gotten a pullback to spring and we would anticipate a spring rally to
begin sometime in April. The gold stocks are down 30% FROM THEIR HIGHS, AND GOLD is off
about 125 dollars per ounce so that #3 above has somewhat played out.
This is one of the times of the year when a 4-6 week tradable rally needs to be watched out for.

Then and now

During the rally of last fall, doing updates and market analysis was easy because price was
TRENDING. Identifying the EXACT turn was much easier because it was a breakout from an
18 month price zone. Gold was having a major move and the patterns and cycles and
momentum made it easy to look for weakness……………because there just wasn’t any. No
weakness meant only one thing, higher prices. For those of you who followed along during that
rally, we were blessed by the Gods to remain long throughout the entire rally and recognized a
top of sorts was developing the first week of December.

Today the task is much more difficult and that is because in order to isolate a medium term
bottom there must be some evidence or divergence developing to provide a clue of a potential
bottom in price. Compounding the difficulty is that there are short term bottoms in price that
develop and then bounces that last a few weeks and then another attempt at a market low until
such time that the downtrend REALLY ENDS and a new uptrend really begins.

What is a good batting average?

If you sit back and analyze the dialog that the market mavens project week after week, myself
included, you will come to realize that NO ONE KNOWS THE EXACT BOTTOM that ends up
being the ―LOW‖. There can only be the constant ―weight of the evidence‖ to measure the odds
of market lows. There are always a few who make the ―right‖ call at the latest bottom and
obviously some are better than others at it. Anyone with an objective mind (or anyone who
follows all of these calls) knows very well that no one calls each market bottom correctly. Like
a baseball player, it is a matter of a good batting average. The other question that must be asked
is whether trying to pick a bottom or a top is a good way to make money in the
markets…………..CONSISTENTLY. That is the key word. The market always gives you a few
―called‖ tops and bottoms. Usually it just gives you enough so you come back and try it again
and again. I guess the real question is this………….do the people who follow the KEY ELLIOT
wave guy really make money? I find their analysis fascinating, but once again they have been
advocating shorting the stock market since Dow 10,000 (almost 1000 points ago). One
publication is 200% short. (Leveraged). They have been bearish on gold since the 480
area……………and if they hold their bear stance long enough they will be proven correct as
they were for the 2007 stock market crash. But would any investor have any money left to bet
by the time their forecast was correct?

One can have methods and analysis of support and resistance, Phi time cycles, seasonal charts,
full moon and new moon dates, supply and demand fundamentals, the juxtaposition of the stars,
the high and low ocean tides nearest Wall Street, which wave of Elliot we are currently trading
in, and a host of technical indicators as varied as the trader’s imagination. And all of these
indicators have merit. It’s just that our expectation of their accuracy must be taken in context of
what the parameters of statistical standard deviation that exist within each market pattern are. In
plain English, baseball players and market prognosticators do not get a hit each time at bat. That
is why the weatherman comes on every 24 hours and the market analyst every few days or week
in order to update the overall progression of the current market/weather pattern if you will
because markets and weather usually doesn’t remain static for long periods of time.

Although we all know that spring begins in North America on March 21st, the temperature still
varies enough to have deep freezes in May or even in June sometimes. Other seasons bring
warm weather early never to see a spring frost. Markets have these same tendencies. They have
certain cycles and patterns they follow but each year just as weather has temperature, wind, and
precipitation differences that will affect the average outcome, markets have variables that cause
the ebb and flow of price to vary in the same manner. Gold usually makes a low near this time
of year but a time variance depending on the variables can and does cause early or late bottoms.

Eventually spring does arrive and the temperature lows for the year finally subside and the
seasons move on. In gold the spring and summer lows for the year eventually arrive and leads
to the autumn rally like we saw last year. Therefore our approach to the market should have a
built in expectation that the best time to expect higher prices is in the autumn months. The rest
of the time we need to be a bit more cautious. The second best time to own or at least be on the
hunt to purchase the gold stocks and gold is usually in the April and May timeframes. However
these timeframes usually give way to the seasonal July lows so it becomes a matter of purchasing
gold or PM’s not necessarily at the exact lows but at a time where you’re more likely to have
gains than losses. There are years (like 2009) when the low for gold was in April and not July.
There are other years when the low in gold occurs in the October/November timeframe line in
2008. So we are never quite sure which timeframe will produce the absolute low, we know that
each at least has some type of rally that occurs in that timeframe.

In 2009, the month of April provided the ACTUAL LOW for the year in gold. In 2006 the
month of May provided the ACTUAL high price for the year that was not exceeded for a full 12
months in advance. So while there are seasonal tendencies in gold, each year can have a drastic
difference in where price highs and lows occur. I believe it is due to what position gold is at
during its price cycle but that discussion is for another day.

The gold chart below appeared in our January monthly edition and was a fine representation of
what I’ve been calling the 21st Century Gold Bull market. It has been in effect since after the
turn of the century and has just completed a 13 month run up from the November 2008 deflation
crash low of 680 dollars. Since that deflation low, gold is up $400 plus dollars per ounce and
interestingly has been averaging a gain of about a dollar per day. So for gold to take a breather
here is not something out of the ordinary. (CHART SHOWS DEC 31 2009 CLOSE as last
price)
The two channel chart above shows where gold has finally moved above the LONG TERM
DOTTED black channel line and is attempting to make a momentum change to a faster rate of
growth. The red momentum channel is the potential new rate of growth for gold. The lower
band represents price support and the upper red line represents the point in price where spike
highs have occurred throughout this bull market at about two year intervals. The best example of
this is the last three peaks of 2006, 2008 and the most recent peak we just saw in December all
terminated at the upper red channel line.

The most glaring observation is the fact that each time the upper red trend channel line has been
touched with a price bar is the subsequent price pullback has produced a hit of the bottom red
channel line. The most likely place the PULL BACK LOW from this recent December high is
going to occur is at ONE OF THESE CHANNEL LINES ON THIS CHART. The most likely
low would be the lower red channel line because all other pullbacks have bottomed at or under
the lower red channel line.

The second most likely place for a bottom would be at the UPPER DOTTED long term black
channel line where the old resistance line might now be considered price support. That upper
dotted CHANNEL line IS NEAR the $1040 area and REPRESENTS WHERE February's PRICE
LOW OCCURRED. Finally, the least likely place a low would occur is the lower bottom dotted
channel line. Interestingly this area encompasses the 680-700 area and is ―the‖ price target of a
lot of bear market Elliot wave technicians have pointed to as a bear market target. While it is
the least likely place I see as a low, it is the most likely place the Prechtorian Elliot wavers have
their site set on. And who am I to say they cannot be correct? I cannot. I will not. If there is
anything we should have learned from the last few years is that anything can happen.

I posted this earlier chart purposely to show that the 2009 closing price of 1095 per ounce is
exactly where gold was trading Friday morning March 26, 2010 and that there has been no NET
CHANGE to price this year so far during the first 90 days of the new decade.

Going forward what is the most likely thing gold is going to do in terms of Price?

One of the most famous and legendary speculators of all time was W.D. Gann. When it came to
price projections he said this: If you want to know where price is going you just have to look at
past history. Now when he said this it might have been helpful to have indicated that he meant
to look at it for more than just a cursory glance, but to meticulous study the fractal repetition that
exists inside the markets.

The chart below shows the GOLD fractal pattern and how price has been following a pretty
similar pattern over the past decade. Depending on how and where you start your counts, an
initial 8 or 13 month rally takes hold, followed by a 3-5 month pullback low ----and then a
prolonged sideways to higher pattern approximately 8 months in length takes place. -----and then
the process repeats.

Look at the middle circled pattern. Do you see how it resembles the one before it and the one
after it? The one before it is harder to see and the one after it has a more pronounced pullback
(due to the crash of 2008) but the pattern for the last 10 years has been……..RALLY –
PULLBACK – TO SLIGHTLY HIGHER—THEN SIDEWAYS FOR A WHILE……………
and then start all over. RALLY—PULLBACK—TO SLIGHTLY HIGHER--- THEN
SIDEWAYS FOR A WHILE. RALLY—PULLBACK—TO SLIGHTLY HIGHER—THEN
SIDEWAYS FOR A WHILE.
Until we see this pattern change……………THE MOST LIKELY THING GOLD WILL DO is
repeat this pattern and continue in this fashion until…………..well……….until it changes.
There is no other pattern that we should look for until the TIME THAT THE CURRENT
TREND CHANGES or ENDS. What else should we assume from this price chart that would
have us assume anything different? Nothing ………….until there is some evidence that the
pattern is no longer repeating. Then it would be time to relook at the pattern. But not until then.

If we use the middle pattern as a base outlook and we count backwards from the spike high
above 700 we can see there are approximately 8 months from where the initial rally began. If
we count forward from the spike high, we can see there is an initial 5 month pullback low, then a
sideways to slightly higher 8 month period that transpires before the next big rally gets under
way.

Lets look at the latest pattern on the right side. Lets take the month with the price high that
sticks above the upper red and dotted channel lines and count back appximately 8 months. We
can see that this is the area where the rally had its beginnings from. If we count forward from
that price high we can see this is where the crash of 2008 occurred. From this position there is a
time extension to the pullback from 5 months to a length of 8 months. I believe that this was
influenced by the crash of 2008. The point of the fractal is that it doesn’t have to be an EXACT
replica but a reasonable facsimile of the ongoing pattern within the trend. After the November
crash low, the gold market has gone on to replicate another leg up. It has the same pattern as the
middle pattern. RALLY – PULLBACK –TO SLIGHTLY HIGHER—THEN SIDEWAYS FOR
A WHILE. The rally that began last August/September is the latest part of a new fractal pattern
that is unfolding.
The market itself provides the best data for what is most likely to happen………and that is what
has already happened in the past. That is what a TREND is…………….something that is
repeating. What other possible forecast could we look at that would provide a more likely course
and direction for gold than one that is intact for 10 years? This is not to say that trend won’t
change, but that we should rely on this current pattern until there is evidence to suggest that a
change to it has occurred (not that we EXPECT it) and that the PATTERN ITSELF HAS
CHANGED. Otherwise the most likely thing is for trend to continue in the same fashion that it
has done so. Over the last 10 years gold has put up with EVERY SITUATION thrown at it.
Inflation worries, deflation worries, rising interest rates, dropping interest rates, a rising dollar, a
falling dollar, a real estate boom, a real estate bust, an oil price explosion, an oil price collapse, a
borrowing binge, a borrowing collapse, a 4500 point USA stock market rise in 12 months, a
7500 point stock market drop in two years, …………………………….. I think you’re getting
the point. Gold has seen it all. If gold has seen it all and the situation is about to get worse and
not better then the most likely direction for gold is up.

A glimpse of the most likely coming price trend

If we were to take all the available data on price patterns we have seen thus far and make a price
projection based on past history into the future what would the pattern most likely resemble?
The answer is it would resemble the past. It would most likely resemble the past until such time
that the trend and the current pattern would complete its upward movement and then finally
reverse and begin an opposite reaction back down. Until that time the most likely thing would be
for this pattern to keep repeating itself.

This is the best information we have going forward of what GOLD IS MOST LIKELY GOING
TO DO based on all the information we have about the current gold bull market and what it has
DONE SINCE IT BEGAN RALLYING 10 years ago. This is what it has been
doing………despite all of the other trends and reversal of trends that all of the other markets
have seen. Gold has been one of the few markets that have maintained its long term price trend
over the last decade.

Should gold continue to ―MIRROR‖ itself in price patterns and should gold remain within the
confines of the red momentum channel lines maintaining its current path and growth in the chart
above ……….then the chart below represents what we should expect (at this moment in time)
for gold over the next year to year and a half to perform based on the current pattern gold is
following.

The BULLISH CASE FOR GOLD CHART PATTERN – A PROJECTION USING

MARKET SYMMETRY

If the current pattern in gold continues, the chart below represents a PRICE PROJECTION of
what is most likely to transpire in the coming year. Gold would maintain a choppy period
bottoming in the April/July timeframe of this year with a rally to the 1300 area going into
February 2011 and a high in May/June of 2012 near 1500 before a new fractal would begin to
develop.
The chart above shows the most likely course gold will follow its bull market run.

The February low of 1044 in gold has potential to be the low for gold but there is also a potential
for gold to drop to the 980-1000 area one time during the coming 2nd quarter of 2010 with the
ideal low for the year in April or secondary in July of this year. Based on the evidence of the
past the most likely time for a low is somewhere in this April to July timeframe. Again I am not
anticipating EXACTNESS, but a reasonable facsimile of the past.

The above scenario is the monthly Bullish case for gold. It is not the guaranteed scenario but I
think it is the most likely given the current set of conditions. As each month goes by and a new
monthly data point is available one can update this chart by taking that month’s range into
consideration. In the end all equations and fundamentals come down to
supply/demand……………market psychology, market manipulation and the unknown.

How many who predicted the stock market crash got it right the first time? They had been
predicting a crash for quite some time before it actually came. How many of them predicted a
4,500 point rally in just 12 months from the crash low? This is not to belittle market
prognosticators but to point out how difficult it is to foretell the future price of anything. There
are great calls being made all the time. But they are difficult and they do not come from people
who are batting 1000.

It has been shown that not all outcomes are the same even though circumstances might be the
same for both occasions. In other words there is a psychological factor of perception that comes
into play in each event that is always a wild card. In a world famine it can be argued that one is
better off owning physical rice than he is physical gold. With that thought in mind let us look at
the downside potential and what that would look like……… if just to say we looked at the
potential as a contingency tactic.

The bear side of the equation

What if the deflationists are correct and gold is really peaking here and one more wave lower
exists before the hyperinflationary times arrive? Is this even possible? Anything is possible in
today’s market because we can no longer trust the manipulative forces behind the markets nor
can we be certain that humans will act accordingly. The best evidence for such an event that the
price of gold is going lower from here is how many see inflation and higher gold prices as almost
assured and how few people support a lower gold price. The investment world highly favors
coming inflation as a guaranteed event. And well they should because that is all we have seen.
All of this printed money will surely cause inflation right? While it is a rare condition when the
majority is correct, gold is such a small universe in supply that the potential of a price explosion
certainly seems to have the best merit of outcome. Has all of the dollars or borrowed money to
bail out Fannie Mae gone into the economy or at the PURCHASE of goods or has it just gone to
REPLACE existing bad debt? If it was to just replace existing debt, how does it create
INFLATION NOW? Not to say later it won’t later. Certainly we can see how it creates a
PANIC to move out of US DOLLARS and we have seen that. If the banking system shut down
would it be because there are too many dollars in the system or not enough? If not enough,
could there not be a temporary spike in demand as everyone would be trying to get to their
dollars? How do you buy gold without having your dollars in hand? These questions are
rhetorical but I’m just making a point that we really don’t know for sure exactly what will
transpire when the system finally shuts down. For if you hold gold at these levels it should be
because the outlook for the future is precarious at best.

If the Dow can go from 14000 to 6600 and in 12 months time go back to 11000 – are we to say
that the price of gold will absolutely not drop in a panic move such as the stock market
experienced, the oil market experienced, the grain markets experienced, the junk bond market
experienced, that silver experienced? Can we say it for sure? Gold can’t go
lower…………..all of these other markets can go lower but not gold. No. Never.

Who at 147 dollar oil thought under 40 in a year? Who at 8 dollar corn thought under 4 dollars?
Who at 21 dollar silver thought UNDER 9 in a year? Of course not many of us think it
likely………because it isn’t LIKELY. But it is possible. This is not to say that the 21st Century
gold bull market will be over, but to suggest that another downdraft cannot 100% be ruled out.
With the perverseness of markets maybe we should almost expect it.

But if we were to get a MAJOR correction the most likely direction and pattern to unfold would
look like the chart below for the simple reason that it would mirror the current uptrend in an
opposite reflection of price. Amazingly, it shows a head and shoulder pattern, a double
bottom at the 680 area and a touch of the long term lower channel line.
The chart is a mirror reflection of the price pattern we have seen over the last 15 months with
consideration that if the TREND REVERSES HERE it would to some extent mirror trend in an
OPPOSITE manner.

Which analyses is correct—higher or lower?

Anyone who tells you for sure he/she knows the future is not being totally honest with you or
themselves. Yet as humans and since Biblical times we all want to know …………….THE
FUTURE. It is in our nature to want to know………indeed to demand our favorite analysts to
know (LOL) and to provide everyone with a direction and outlook of what price will do in the
short, medium, and long term. What it will do tomorrow and what will it do this coming week
and coming month? To be truthful it is a compliment and testament to the excellent market
prognosticators that do exist just how well some do in their evaluations and market studies.

This study is a longer term study of what my expectations are for the coming year. Should the
bull market in gold continue I am looking for price to rise towards the 1500 dollar area over the
next 12-18 months with the potential for much higher price should gold move above the UPPER
RED channel line that is shown on the chart in this report.

As a contingency there is a projection for a bear market drop in gold contained in this report as
well. That scenario is a secondary scenario that would only be addressed if the following things
began to occur.
 1) A drop below the 1026 area and the 200 day moving average would raise the first flag.

2) A drop below the 975-1000 area would raise the second flag that the downside is
unfolding as dropping under 975 would suggest that all is not as it seems in the land of
gold.

Should these two things begin to develop, it would be prudent of us to readjust our thinking and
bring this scenario to the forefront of our analysis and maybe measure our risk profile to make
sure it is still one that we should be holding. Until that time, we will let the bullish side of the
equation take up our main analysis. However, we never ever want to take the downside as
something that CAN’T happen to gold.

2nd Quarter outlook for 2010

Based on both charts we have looked at the most likely price range for this spring and up until
the July timeframe is the 975-1250 area in gold. We think gold remains in some type of trading
range. Higher prices this autumn has the best potential for the outlook and price lows for this
year most likely will occur either in the April or July/August timeframe.

Please refer to our weekly updates for a running commentary on how this progresses over the
next few months. We expect some type of 4-6 week rally at some point this spring. The ideal
time will be the April/May area. From there, some type of pullback into July is the most
traveled path by gold.

The month’s of March/April is usually a time when there is a trend change in not only gold but
other markets as well. The current pattern is suggestive then that this year’s spring rally ideal
time would develop at some point in April.

Market analysis

What we think a market is going to do matters not. In fact, if we are honest with each other we
will acknowledge more often than not that a market does mostly what we don't expect. It is the
ability to adapt to that change when it occurs and to follow the market that measures success.
How many times have we gone long at a market turn because we thought the bottom was being
placed only to see it drift lower after a short term bounce. The low is not in place because the
market has not turned trend around by beginning to make higher highs instead of lower lows yet
and until it does the TREND WILL NOT TURN. It can't turn until the market begins to make
higher highs and lower lows. So we can buy each bottom bounce hoping its the one, or we can
try to get a LITTLE more of a confirmation of a trend change than trying to pick a bottom
because your favorite indicator is flashing an overbought situation.

There are many avenue's to market forecasting. My method is to look for trends that are
repeating and continue to expect those patterns to be repeated until they change. Following price
is much more powerful than predicting price and the projections that are in this update are based
on trends that have been repeating. They are not my arbitrary projections. They are the
MARKETS own projection of what price is going to do based on what it has ALREADY
DONE. What better projection can we make than the markets own projection of where it is
going? If you think about it, these projections are the least arbitrary projections that can be made
since they are just the REPETITION OF WHAT THE MARKET HAS ALREADY PROVEN IT
CAN AND IS CURRENTLY DOING RIGHT NOW.

Bottom line:

The 21st Century Gold bull market is intact and the uptrend continues to be the favored path of
least resistance. There is a medium term correction that should be near completion and a 4-6
week rally should be developing in gold that leads to a mid to late spring top, followed by some
type of pullback into the early summer months.

There are a lot of big changes that are coming to the world as we know it. In many cases it is for
all the MARBLES. Whenever that's the case, you can bet gold is going to be involved. The
system of things we currently are under is broken and no longer works because it is built on false
wealth -- paper money. All paper money schemes have ended in utter insolvency. This one is
there.........it is insolvent..........now it just needs to end. That is all that really is coming.....the
other shoe to drop.

Gold should be the leading instrument that gives us guidance as its bull market develops further
and provides a means of wealth preservation and catastrophe insurance for its holders. Odds
suggest this bull market might be resting but is far from being complete. It is now becoming
obvious that gold and silver are being manipulated by the same bunch who had the power to take
down the entire banking structure of the United States and the almost the global community.
One that transferred the cost to the American taxpayer. The last time our leaders got into a
pickle as big as this was in 1933 in the USA. As the banking system went on
holiday...............GOLD WAS MADE ILLEGAL overnight, and ordered to be turned in. Suffice
to say.............. we know hard times are coming............but there will be many surprises along the
way. But this will not work either. In Vietnam where gold has become restricted as the
government tries to force the use of currency, the price of gold is now up to close to a $50 dollar
per ounce premium.

As long as gold keeps making higher highs on the monthly chart.......... expect higher prices.
Should we begin to close under 1000 again.................a careful eye should be kept on gold.

Areas of price importance this coming quarter

On a weekly basis …………… trend support is the 1026-1040 area.

On a monthly basis………….. Monthly support is the 975-1000 area.

On a yearly basis……………… yearly support is the 825-850 area.

. CHECK OUR FORUM FOR MORE REPORTS ON INDIAN EQUITIES www.chiefsforum tk

DISCLAIMER
The opinion expressed in this report is the opinion of the author. The information provided
was researched carefully, but we cannot guarantee its total accuracy. The report is
published for general information and does not address or have purpose or regard to advise
specific investments to anyone in the general public. It does not recommend any specific
investment advice to anyone.

MUSIC MOVIES SOFTWARE

LIVE TV
REMIX
RADIOS