It's time to take another look at gold.

Shiny Yellow Metal

It's time to take another look at gold.

When I last wrote about the shiny yellow metal, it was trading for about $910 per ounce. I suggested nibbling on the metal if it dropped below $900, and backing up the truck to buy if it fell close to $800.

We've had several opportunities to nibble since then as gold dipped below $900. But we never got to load the truck. Now, with gold at $960, maybe it's time to take a fresh look at the metal. Here's the chart...


Gold has support at $875 and resistance at $965 (both in red). It closed at $960 yesterday, so the metal is bumping right into resistance. Also, the recent action over the past two months has the look of a bearish rising-wedge formation (in blue). We've seen how bearish rising wedges tend to break to the downside, and that's a bad sign for gold's immediate outlook.

As a trader, I'm more inclined to sell gold here and look to buy it back if it falls closer to its support line.

On the other hand, there's no doubt gold is in a long-term bull market and the fundamental story behind investing in it has never been stronger. In fact, the fundamental story may be strong enough to break gold out of the bearish chart formation, hurdle it over resistance at $965, and launch it toward the February high of $1,000 per ounce.

So how do we reconcile the conflict between trader and investor? Easy... we hold.

Gold is in a bull market. We know that because the metal is trading above its 40-month exponential moving average, which defines a bull market for gold...


As long as this is the case, then the correct strategy is to buy the dips. Take advantage of price weakness to add to positions. Yes, there's a strong probability gold will break the rising wedge to the downside and slide back down toward support at $875. That'll be a great opportunity to buy more, because there's an even stronger probability that gold will be higher a few months from now.

Oh sure, aggressive traders can sell here and hope for a decline. If gold breaks out to the upside, then they can jump back in at a slightly higher price and still be in the trade. But most people don't have the psychological strength to buy back a position at a higher price.

Most people are better off holding through a short-term correction.

If you don't own any gold yet (what are you thinking?) then yes, it makes sense to wait for a pullback before starting a position. But if you already have a good stash of the shiny yellow metal, sit tight. A pullback is a chance to buy more.

If you're interested in gold this is definitely a video you shouldn't miss. I will also show you exactly where our "Trade Triangle" technology recently kicked in a buy signal for this market.

After all, it's a bull market.

Best regards and good trading,

3 comments

robertpalmisano profile image

robertpalmisano 7 years ago Author

China has reported that it has been secretly increasing its gold reserves.

It was able to keep it secret by buying domestically produced metal, almost doubling the amount of gold it holds to more than 1,000 tons.

China has the biggest foreign exchange reserves in the world, totalling almost $2,000bn (£1.373bn).

Of course, this will excite the gold bugs, and feed the storyline of China de-Dollarizing their holdings. Though they continue to fund our crazy government spending, it's true that they've made a number of moves away from just holding dollars. In addition to gold, they've been buying copper like crazy, trading dollars for Russian oil and engaging in currency swaps with countries like Argentina, so they can trade without settling in dollars.

No, but really, they'll never stop funding us, right?


robertpalmisano profile image

robertpalmisano 7 years ago Author

In today's video on gold I'm going to share with you my thoughts on the cyclic pattern of this market. I'll show you where I believe the lows have been put in place, and also where I expect the next high will come in.

If you're interested in gold this is definitely a video you shouldn't miss. I will also show you exactly where our "Trade Triangle" technology recently kicked in a buy signal for this market.

Take a look at this video today and be sure you leave your feedback on our blog. There is no registration requirements nor cost.


robertpalmisano profile image

robertpalmisano 7 years ago Author

Adam took that info and hit the digital den to try to explain just what happened

to the Gold market.

Please check out the video, if it's valuable to you, it'll be valuable to your readers! So post, email, or tweet this for their benefit!

Title: What happened to the gold market?

http://www.ino.com/info/415/CD3062/&dp=0&l=0&campa...

Pretty good video

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