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Corn Price Chart Says Gold Going Higher
Pinnacle Digest writes: Gold, silver, corn and even soy beans are all looking extremely bullish according to Stewart Thomson’s latest article. And he says they’re all related, with corn being the bellwether. Thomson specifically points to the relationship between gold and corn and how their charts have virtually mirrored each other - with corn moving a few weeks in advance. So what does that tell us about the near-term movement for gold?
Take a look at corn’s price chart below:
That’s the corn price chart since September of 2009. Notice the parabolic 20% rise it recently made in about two weeks.
Take a look at gold’s chart below:
That’s the gold chart since April 2011. And it’s strangely similar to the corn chart’s most recent 12 months. As wishful as this may sound, Thomson breaks down the historic price relationship between corn and gold. It goes much further back than just the last 12 month chart.
It’s mentioned that most gold investors are quite bearish at this moment, given that the consensus is gold will break its $1525 support line. Fear not, according to Thomson, as corn broke its $1525 equivalent before skyrocketing over 20% in recent weeks.
As Thomson states, it’s not fun buying a commodity or stock when everyone believes it is going lower. However, when it does take off, in the manner corn has, it happens too quick to capitalize on. You have to be in before the rise, which requires some courage. In support of this, Thomson states “Rising food prices have an effect on gold. There is only so much marking to model that Ben Bernanke can engage in, before he has to admit that there are growing inflationary pressures in the food markets.”
In his article Thomson explains the striking correlation between rising food prices and rising precious metal prices. The article is very bullish towards precious metals and gold miners in particular.
Click here to read.