I follow the precious metals market closely, both out of general interest and for the ever-enticing trade opportunities the group may present.
Here is a quick recap / prediction come true, much to my chagrin actually, because I like seeing gold move up.
<— How I feel when gold moves steadily up.
From early July to mid/late August, gold began a move that was a little too sharp to the upside for comfort.
That night, Jake reported he had wisely divested himself of 70% of his paper Gold holdings intraday. I definitely agreed with that analysis, and set my stop under the daily low, which was hit the next day. I sold all my IRA gold at 181.50ish (I bought ~130).
I had two comments in his blog
I grudgingly concur bec every time Gold has become this…momentous it has pulled back for at least 6 months. I do loves gold though, a lot. Obviously the trend is still higher in the LT sense, maybe 2000 is the big round number that ends it. Maybe, chavez was a magazine cover indicator. But yeah, at least a pullback soonish, it seems (perhaps to coincide with equity bounce?)
Here is that “momentous” chart I was referring to. Just a simple 50 day percent change on a weekly chart as a guide:
The call though that I am most satisfied with is this one however, in comment two:
also watching for possible “silver” top where we set some high here, pullback sharply, break that high, take out that low. The ol’ 1-2 false breakout a roo.
So far, that’s been the approximate case.
Silver had a much steeper ascent and resultant sell-off. Also, the ol’ fake breakout happened over 5 days, not two weeks. And, until 1750 is broken, we haven’t decidedly made a lower high/lower low that would constitute a downtrend.
So what’s next?
– I still believe that the POG can correct sideways for several more months.
– The PRIMARY fundamental driver of the PoG is rates < 2%.
– The SECONDARY fundamental driver of the PoG central banks aren’t leasing it.
As long as these conditions remains true, the fundamental backdrop for gold is still bullish