Gold Commentary

This is my long term chart again. We crashed down through 1500, but were quickly arrested. There is tremendous amounts of support around 1488. I was worried we could see 1460 in my last post. It seems we've not broken below this major trend line. I've marked the danger area that we flit in and out of as I write, which is 1480. I'm cautiously looking for some real nice buying opportunities at 1495ish. We might see some consolidation at the current level and perhaps edging up slightly above 1500. If we see 1460 anytime soon, I'm going to be looking for downside protection as that would create a very strong negative signal. Remember the above is a 10 point chart which won't show 1490 until we hit about 1495ish. It's a good time to watch the news. The markets are fickle and over-react to just about anything the Fed say. Although I think the strengthening of the Dollar has more to do with the fiasco in Eurozone. Perhaps people might actually start to realize what a mess the UK is in too, much worse than the US.

Gold Commentary

Well, since mid April this is really the only downturn we've seen in a massive rally after Gold broke above 1440, that's 1440 to 1570 in a couple of weeks! I'd expect at least a 50% retracement of that Rally, which would put us right about the 1510 mark, which we're nearing now. Below that I might start getting a bit defensive and worrying about some longer term protection. Take a look at long term chart to put this down move into perspective.

Long Term Chart

The next chart really shows that Gold is not giving up ground as quickly as it gained it. That's a good sign as the markets discount quickly! What is apparent here is that the rally has been clear right from 1420. There wasn't resistance at 1500 on the way up, so the real support looks to be between 1420-1460. That would put our retracement figure below the 1500 mark! It's difficult to say, the rally seems a bit full of air with that large bubble forming in the picture below. We'll have to keep a close watch. Is it serious or is it time to buy-on-dip!