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« Gordon Brown: Breaking The Back Of Inflation? | Main | GOLD: 2008 Here we go! »
Friday
Jan042008

Gold Stocks: Nearing Overbought Territory

Gold is at an all time high, gold stocks are making new highs, there is so much good news coming out of the precious metals sector at the moment, it is hard to be negative about any aspect of this market.

Gold is Nearing Overbought Territory

However, we try never to get carried away with large flows of good or bad news and keep a level head at all times. Bearing this in mind, we have noticed that some gold stocks are nearing overbought territory as shown by the charts below. Some of the technical indicators are suggesting prices are too high and many stocks are a fair way above their 200 day moving averages.

Gold Stocks: Nearing Overbought Territory

We could be coming up to a top in gold and gold stocks, which will be followed by a correction and consolidation period. Therefore we are not buying any more gold shares for the moment, although we are pretty much fully invested anyway. As always we will look to add to our holdings on any dips that we see and you can stay updated on our trading signals and investment ideas by subscribing to The Gold Prices Newsletter free of charge, just click here and enter your email address.

Longer term
whether these stocks are slightly overbought or not is somewhat insignificant as we believe that our gold stocks will be more than double from where they are now in years to come. So if your are investing for the long term, there is nothing wrong with buying gold stocks at the moment. However if you outlook is over a shorter period, or you want to maximise profits/limit losses, then we think it is a good idea to wait and watch this market for a while, and just hold your positions in precious metals.

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