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Copyright 2010-2012 GOLDRUNNERFRACTALANALYSIS.COM

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 beenconditioned 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 Idoubt seriously those numbers have anything other than very short-termsignificance for Gold and for Silver.

3) Bullish individuals might be talking higher numbers, but for many thatseems 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 DollarPrinting necessary to devalue the massive debt and to stave off aDeflationary Depression, thus creating Stagflation.

2) We have laid out our fractal price projections off of the late 70s Gold andSilver 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 stilltracking 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 ourexpectations 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 projectionpotentials 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 aregetting 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 isperfect 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 tothe 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 andMACD 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 comebefore 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 weeklylog 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 willlikely 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 abovethe 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 andSilver at this time.

2) The 3 fan-line formation break can be explosive since the main formationresistance is broken along with the top fan-line.

3) The current similar progressive price and indicator comparisons to theModel 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-lineformations 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, thehigher 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 higherpricing 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 offthe 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 70sfractal 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 pointin 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

[email protected]

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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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