Where Gold Is Going
Following up on the gold trading going on now, we may be getting our answer. It looks right now as if the correction will continue How far down? We'll have to see.
Something really interesting happened yesterday. The COMEX settled with gold up 1.2 to around 1387. That put gold above its 50-day moving average (see previous posts for why this matters). But after that, the spot price dropped around 10, and is now down around 11, putting the gold price securely below its 50-day moving average.
Why bring up both the COMEX settlement for Thursday and the spot price? Well, the COMEX settle is a price that traders follow, since it establishes a "closing" price for the day. And some traders work with closing prices. The spot price is the price that trades not quite 24/7, but a good part of the day. It's a kind of continual pricing mechanism.
Anyway, if the COMEX settles below the 50-day moving average - and settles more than a buck or two - then stays below for a few days, I think it's safe to say we're going to correct the rest of the month, maybe longer.
One thing to factor in is that when gold gets near 1400, it's been pushed down; when it drifts down near 1360, it gets pushed up. So it's stuck in this range. And maybe it just stays in that range for the time being.
Again, none of this changes the fact that gold continues in a long-term bull market. But if we correct below 1360, especially if gold breaks below 1300, you've got to consider that a really great spot to buy.
Right now, I'm sticking with the idea that gold will correct in January and hit its low for 2011, then head up to a higher record close in the coming months.
Something really interesting happened yesterday. The COMEX settled with gold up 1.2 to around 1387. That put gold above its 50-day moving average (see previous posts for why this matters). But after that, the spot price dropped around 10, and is now down around 11, putting the gold price securely below its 50-day moving average.
Why bring up both the COMEX settlement for Thursday and the spot price? Well, the COMEX settle is a price that traders follow, since it establishes a "closing" price for the day. And some traders work with closing prices. The spot price is the price that trades not quite 24/7, but a good part of the day. It's a kind of continual pricing mechanism.
Anyway, if the COMEX settles below the 50-day moving average - and settles more than a buck or two - then stays below for a few days, I think it's safe to say we're going to correct the rest of the month, maybe longer.
One thing to factor in is that when gold gets near 1400, it's been pushed down; when it drifts down near 1360, it gets pushed up. So it's stuck in this range. And maybe it just stays in that range for the time being.
Again, none of this changes the fact that gold continues in a long-term bull market. But if we correct below 1360, especially if gold breaks below 1300, you've got to consider that a really great spot to buy.
Right now, I'm sticking with the idea that gold will correct in January and hit its low for 2011, then head up to a higher record close in the coming months.
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