Bush narrowly won Ohio to give him just enough Electoral College seats to retain the Presidential title in a closely contested race. But he won the popular vote by the largest margin in many years and the Republicans increased their grip on the Senate and Congress. By any stretch of even a Democratic imagination this was a general vote of confidence, not the symptom of a divided America that so many TV commentators have propounded.

From the other side of the South Atlantic I interpret this as a clear and positive mandate for a man of proven action in preference to a professional politician who unconvincingly talked about action. With this control of government I expect to see a lot more decisive conservative action from the US Presidency during the next three years. Not just more of the same. I believe that history will place George W. Bush in the 'Action Man' category.

On the day of the election the gold price was smacked from $426 back to a low of $417 on the misplaced assumption from the exit poles that Kerry would win comfortably. He represented conciliation and a potential reduction in global tension. Immediately after the Bush victory was confirmed the gold price rebounded to $428, a higher level than the pre-election price.

Bush's re-election is unlikely to reduce the current levels of international tension, and will certainly not placate the Middle East's negative interpretation of US foreign policy. Ben Laden's video attempt to affect the US elections has back fired and France's publicly stated overwhelming desire for a Kerry victory is now a political embarrassment.

The past two days has witnessed a move by the gold price above $430. I again reiterate that this 15 year resistance on the gold price is the most important chart in the market at this point of time. A move above the $430 - 435 level will trigger a serious surge in the gold price to at least $465 and probably $485 in a short period of time. I look for a strong upmove in the gold price once the $430 - 435 resistance is finally broken.

Brent North Sea oil had my expected breather at the $50 level. But this is only a minor correction. I am still looking for an oil price well in excess of $70 a barrel.

Silver continues to dominate the precious metal markets. Platinum and Palladium are lagging although the South African platinum stocks are showing new potential upside. I like the platinums. The $ based gold stocks have performed superbly and should continue to run on he back of a charging gold price. The Rand remains strong and continues to dampen enthusiasm for the South African based stocks.

The past nine months has been a typical natal period for the gold price. There has been a dominant call for the price to fall back to $360 based on Elliott wave analysis. With gold breaking above $430 such an expectation does not look like a reality.

During this period I have constantly detailed my analysis that maintained the move from A to B was not the first leg of a new bull market but still part of a large base pattern. As far as I am concerned the new bull market only started at the end of B, not at the 1999 low.

I have constantly detailed my analysis of an extended first bull leg that would have nine smaller waves inside the main trend. I consistently detailed that I expected the recent correction to be the 5-6 leg that would stay above $380 and not drop back to $360, or lower. The move above $430 looks like we are on the way in the seventh leg upside. I expect to see wave seven move to at least $485 prior to the 7-8 corrective wave. Even after the corrective move at eight we still have the final ninth leg up to come. That should take the gold price well above $600 in this first major wave.

As I have detailed previously, once the price has penetrated the final $435 restriction of the fifteen year resistance I expect a very fast move to at least $485. This is a major bull market in both gold and silver and do not forget it.

Yes, this is the precious metal business and prices are subject to some vicious intra-trend swings. But once the main trend is in place it pays to stick with it rather than trying to trade. Stay with this gold market until the $600 level has been achieved. Until then forget about Durban Deep and take your mother in law on holiday.

'Gold & Silver Penny Stocks' is the sister publication to 'Gold Action' and is produced by Dr. Clive Roffey.

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7 November 2004