Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Gold Prices
Gold Price
[Most Recent Quotes from www.kitco.com]
Our RSS Feed

Gold Updates by Mail

Enter your email address:

Follow Us on Twitter
« Rate Cut Brings Light Relief, But! | Main | Gold-Prices.biz: Portfolio Update 16 January 2008 »
Wednesday
Jan162008

Gold Stocks Leading The Way In Next Correction

As we said in our recent portfolio update, we are not recommending any buying at these levels as it is our opinion that gold and gold stocks are overbought and due for a correction.

Gold Stocks Leading The Way In Next Correction

Gold prices have not yet started to drop, but the technical indications suggest that prices are due for a fall back towards their moving averages in coming weeks. The STO is overbought and in the “SELL” zone, as is the Relative Strength Index. The MACD is yet to give us a negative crossover signal, where the black line breaks down through the red, but this cross is due and when this happens it will give yet more evidence that gold prices are in for a short term drop.

In the past years of this gold bull market, we have often seen gold stocks leading gold prices. For example, gold stocks have sometimes corrected before the metal itself, even if just by a few days and similarly gold stocks have sometimes begun to rally before gold prices have got going.

Therefore the fact that the HUI index has fallen roughly 8% in the last two days of trading, suggests to us that gold stocks may yet again be leading gold down in a correction.

HUI Leading The Way In Next Correction

The Relative Strength Index has begun to fall, as has the STO which are both bearish signs. Also if we take a look at the MACD, the black line has turned down, ready to make a downwards turn through the red line, which will give a very bearish signal.

So if you were thinking of buying some gold or gold stocks, we think it would be a good idea to watch and wait for this correction which will present a great buying opportunity. Also if you are sitting on some decent profits and have planned on trading this bull market, it may be a good idea to take some profits at these prices to free up cash to re-invest when prices correct.

To stay updated on our trading signals and investment ideas, please subscribe to The FREE Gold Prices Newsletter. Just click here and enter your email address to subscribe.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>