GOLD: A dent in the sentiment!

The French dump gold, the Chinese take a vacation and gold prices dip below the 2oo Day Moving Average. So what?

So many chartists are hanging their hats on one support level being broken and then extrapolating this one event to predict the end of the gold bull market. If it were only that easy we would all be sipping pink champagne on the back of a yacht moored in an exotic location.

In our book this is not a time to sell. We are not selling anything. As and when the cash becomes free we will look to increase our exposure in the precious metals sector.

Sure the 200 DMA is important and breaching it is not a healthy sign. But look at the last few years we breached it last summer and summer before, so what? Was that it? Good night Vienna? No it was not!

But it was a prelude to some wonderful rallies wasn’t it?




Sit on your hands, go and hit a few tennis balls and relax a little. And if you have a favourite gold mining stock, buy a few more of them.

Sleep tight.

06 October 2006