Yes, it looks like a pause in a decline. Gold has just gone sideways for a couple of days. Although it could rally from the 50 day moving average which is not that far below here (GLD 50 day mav = 134.54 for ex.), I believe gold is in a longer term retracement. More intermediate than short term. My downside target is around 132 and then a bounce becomes likely. Keep in touch by following me on Twitter as DavidBDurandMD.
I do see the possibility of a rally back to around 138ish for GLD but I do not believe that the correction will be over at that point. The next move should be down from there IF we get such a bounce. Tops can take a while to form – quite a while. Why? Because investors get stuck doing what they did last month even if it does not work this month. Don’t do that! I am NOT advocating the liquidation of your long term position in gold any more than I would recommend you converting all your US dollars to Euros. But to me, trading positions are different. When the trend changes, I change and my trading positions go to zero after a failure at a major top. I can always buy higher. I don’t need to “ride the pony down the hill.” You can quote me on that! ; )
If you want to see the PREVIOUS issue: Previous Issue
Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.
© 2011 David B. Durand, M.D. All rights reserved.