It’s official. As the market is trying for new lows, the FEAR quotient climate is so thick you can cut it with a chain saw.

The GOLD ETF (GLD NYSE) I picked on February 3rd at $88.47 is now in breakout mode. $95.50 and climbing. Right now, I believe the flight to Gold is simply fear based. However, I also believe this move to Gold could have legs far beyond investors simply looking for a “safe haven” to get a decent return in an ocean of fear.

Here’s today’s chart:

This is a weekly chart, so each individual bar equals one week in time. As you can see, the price has blipped above the top line- otherwise known as the “downtrend line”. Breaking above this line is technically very important.

The bottom trend line is known as the “support line”. This chart is called an Ascending Triangle, and it has now resolved itself to the upside.

Technically, GLD is a slam dunk for $100, and probably higher levels from there. This would be a new all time high from the March ’08 high of $1,000 per ounce (or $100 on GLD).

While this fear fueled break out is nice for GLD holders, the real move is going to come as this security evolves from a fear driven move to the upside, to an inflation driven move to the upside.

The $800 billion stimulus package is going to be signed into law by our new President today, and the US Government does not have $800 billion in the bank.

Guess where it’s going to come from? We are going to print the money by borrowing and deficit spending our way to it. Guess what that means- the dirty word will come back, and it will keep Bernanke on his toes.

It’s the “I” word- INFLATION.

When the market gets around to recognizing we are going to inflate our way out of this $1.6 trillion for banks and the economy, GLD will be the place to be.

In my next major edition on the issue, we will explore when to buy and a “Logical Profit Objective”.

Comments and Questions are welcome.