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« IMF Casts a Dark Shadow Over Gold | Main | The Gapping Deficit Gap! »
Sunday
Apr052009

Gold: An Important Technical Junction

Gold: An Important Technical Junction

Having broken down out of its pennant formation by breaching line B, gold is set to test a more significant support around $900. Gold appears to be under pressure to break down through C, as a declining RSI, MACD, STO and resistance line A, suggest that a break down is more likely than a bounce up.

The strength in the US dollar's technical picture adds weight to the argument that gold is due to drop, as the greenback has a decent floor of support levels underneath (A, B & C) that could help continue its rally and therefore push gold prices south.

USD and Gold: An Important Technical Junction


We are not selling any of our gold positions, but we have cash on the sidelines which has been waiting to be deployed and this dip could provide the opportunity. We would become aggressive buyers if the RSI on gold were to hit 30, over the last few years this has been a solid signal in a bottom on gold prices.

If this dip happened within the next month, we would be cautious about using gold stocks as a way to play the next leg up in gold, since we are rapidly approaching the worst time of the year for them with “sell in may ” and the summer doldrums looming ahead. We may look to acquiring more of the physical metal or options strategies instead, since gold stocks may also be dragged down by a correction in the broader equities markets.

Stay tuned by subscribing to The Gold Prices Newsletter and you will receive updates on the gold market and which stocks we are buying, completely FREE of charge!

The next couple of months are going to be quite exciting indeed and should provide some very profitable opportunities.


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Reader Comments (3)

It seems to be too hard to make money PM markets as there is no real honest market. Just a series of interventions. You can put up all the technical charts you wish, but as soon as you would expect the chart by its own indicators to breakout to a higher price there is an intervention. It is as if the gold cartel reads the same charts we do and then times the sales to extract the maximum hurt as when most would see a major break out. I don't see a good run PM's until most of us are living under bridges. In other words when the system fianlly cracks PM's will be the last to finally adjust to reality. Perhaps it would be best for the risk averse small timers to buy in at a set increment of physical metals each month. I also have to wonder if certain governments will enact capital gains taxes specific to gold and silver in order to deny the preserved wealth of the wise and provident middling classes. It could be that the midnight gardeners will have to leave their planted goods in the ground out of spite for a generation just to keep it out of the hands of the filthy government. Gold should have gone up quite a bit from the obvious money creation of the Federal Reserve. But if you have an infinite balance sheet, you can create your own reality for a good length of time.

April 6, 2009 | Unregistered CommenterDavid

I saw a recent chart which depicted the 100, 200 and 400-day moving average gold prices over the past 2 years. Interestingly, within the past few weeks all 3 lines converged (at a price just north of $850).

The reason I was interested is that such a convergence has not occurred in the past 2 years (the chart did not contain any earlier data.

I would like to hear from a chartist as to whether that recent convergence has any significance or meaning.

April 9, 2009 | Unregistered CommenterRic

I think everyone is coming to the same conclusions.. Gold is far too manipulated to be left too rocket in the short term. If the SHTF scenario occurs then yes gold will take off.
Question is, is that a great thing to be wishing for..
I can see gold hitting $600 and lower $450 before the truth is revealed about just how shoddy our monetary system is.

April 12, 2009 | Unregistered CommenterSilver Coins

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