Got Gold Report's charts show gold winning the 'race to debase'

Gold is breaking out of long period consolidations. Lots of them. For example, gold in terms of Euros is getting close to its all time high. The Gold:Euro exchange rate is challenging its February turning high and appears to be breaking out of a wide triangular consolidation as evidenced by the graph below which compares the gold price to the Euro Index (as a proxy for the Euro itself).

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Breakouts (or breakdowns) from long-period consolidations indicate that the myriad conditions which conspired to contain the trading within the technical pattern are now changing. Breakouts are a signal that money flow has turned positive for the issue, meaning more liquidity is flowing into it than out of it.

Triangular consolidations are often continuation patterns that resolve in the direction of the prevailing trend sooner or later.

Note the label “Euro Crisis 2011-2012?” The question mark is not whether there has been a crisis for the period; that is self-evident. It is there to denote our skepticism that the European crisis ends this year.

With European reliance on socialist central planning, technocrats and anti-productive, highly producer-discouraging tax policies, we seriously wonder whether the crisis on ‘The Continent’ will end this decade.

For contrast, below is the same chart using the Canadian Dollar Index as a proxy for the Loonie. The smaller, but better-managed (so far) Canadian Dollar reflects market perceptions that the government in Ottawa has been more responsible and somewhat less profligate than their neighbors to the immediate south. Thus, the Canuck buck is farther from challenging its purchasing power lows (gold purchasing power highs) than the Euro, but clearly it too is breaking out of a consolidation. (more)