Weekend Gold Chart Update
Gold corrects from an over heated rally as the bears fight back parabola, selling with both fists. A second CME margin hike likely had little to do with the sell off, considering it was quite telegraphed, however the more than 25% increase did force some to reduce their position. The long term reality is that this price action will merely serve to increase the angle of the uptrend as time goes on. As we know a technical analyst will have to redraw the chart showing this recent breach of $1900/oz as being with in the trend and not outside of it. In fact I already did that.
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Link to the August 13th post here. The weekly gold chart from August 13th below.
so there isn't much to fear here?
ReplyDeleteFear of gold plummeting in the short term, no. Rational expectations of future upside and potential corrections, yes.
ReplyDeleteGood analysis. I would be surprised if gold moved much higher than $1900. Anything over $2000 would get dangerous and probably lead to a mini parabola in 2011 that would correct hard in 2012. If gold can consolidate these gains for a few months, it would be healthy.
ReplyDelete@Gold Rate, I believe we may have a technical nightmare for bulls while keeping a very strong fundamental picture. Demand is so strong it is driving us too far too fast. I imagine later in the year we'll have a great second half of the year where gold breaches $2,000 and silver breaches $50. A correction is inevitable if we break the trendline again anytime soon.
ReplyDeleteGet ready to go into the dangerzone.
Thanks for stopping in GR.