It is the time for oil and gold to rally
Special Correspondent
Jan. 13, 2007

Gold and oil is rallying as we write this one. Deflation is in full force. However, within a secular bear market, gold and oil will rally for now. The colder climate eventually will grasp North America. The Chinese and Indian cars that were bought on credit did not disappear. The fuel demand is still high. The deflation has started in the Western nation but has not reached Asia yet.

Asian demand can take oil even to a new high. Gold can retest the $775 resistance. But that will be the ideal time to short oil and gold futures because the fall from there will be severe and sharp.

Dollar needs some consolidation. However, the consolidation can be short lived. The US trade deficit is shrinking. Believe it or not US President George Bush’s new Iraq policy will work. His popularity in coming months will improve. US budget deficit will reduce. These all are bullish for dollar long term.

The sentiment in gold and oil market showed possibilities of rallies last week. We wrote in India Daily that sentiment is too bearish for any significant fall in those markets. The cyclical bull market within large secular bear market can take gold and oil prices higher.

It is the time for oil and gold to rally
Special Correspondent
The cyclical bull market within large secular bear market can take gold and oil prices higher.
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