Gold Approaching 200-Day Moving Average

With a decline of 3% today, gold is on the verge of testing its 200-day moving average for the first time since early January. With the exception of a one-day spike on the day the Fed said it would buy US Treasuries (3/18), gold has pretty much traded down in a straight line. Even though most observers said the Fed's action would lead to inflation down the road, the price of gold is now lower today than it was before the announcement.

click to enlarge

Comments

[yellowhoard:]

Sounds like a buying opportunity to me.

Apr 06 05:24 PM

[jschulmansr:]

I think we will hold at the 200 day moving average and then sideways between $850 to $1000 until Aug. Then Gold is going to take off. This prediction is also predicated on NO new bad news or crisis's popping up, a purely seasonal prediction play. If we have majors news then Gold will take off much earlier and either way set new all time highs as it begins it's next leg of Gold's major Bull Market Run! Check Out my blog: Dare Something Worthy Today Too! jschulmansr.wordpress.com

Apr 06 06:14 PM

[fxmaven:]

There is a massive reduction in manuf. & service capacity worldwide, autos, finance, whatever else you can name.

Money supply is expanding (even in Switzerland).

Money supply chasing less capacity and fewer resources = Inflation.

When the ECB finally gives up its Weimar obsession and enters Q.E., money will go where it goes when there is nowhere to hide.

Gold.

Because even tobacco & wine eventually spoil.

Apr 06 06:39 PM

[Amateur Hour:]

To the Author -

Could you let me know what charting software you're using?

Thanks in advance.

Apr 06 07:05 PM

[Fighting Yoda:]

Gold is going down, the panic anxiety is over for now. We are going in a deflation phase - all commodities will be under pressure - gold will not be spared.

Apr 06 08:47 PM

[bigeasy8:]

Gold jewelry demand is also way down

Apr 06 11:23 PM

[Homer II:]

Someday down the road, there will be relentless inflation in America. Just not right away. If you want to hold on to your gold or even buy it in here, you will someday also see it rise along with inflation. However, time is money.

Meanwhile, why not look at some other arenas where there is money to be made now without such a long wait.

Apr 07 12:30 AM

[mac.barron:]

Gold is going down and I'm with yellowhoard: if you haven't got some aside as a hedge the next few eeks may be a good chance to not have to pay too dear.

Inflation will come in the next few years. Housing will continue to correct but as manufacturers continue to reduce output and to go bust supply will shrink for many consumer items. Many dollars will chase less production. The world population will continue to grow over that same period and natural resources will be subject to more competition. Many dollars will chase limited supply. Lastly, while "panic" has eased (not that I was panicking mind you) thinking ahead to what the next few round may be like if the bear trap springs again lead me to see a potential rush towards gold in the future that will push the price up significantly.

As always, I'd love to be wrong about the dour stuff. I'd gladly take a loss on the gold part of my portfolio because that would mean that the equities would be shooting up but, sadly, I doubt that will be the case.

Apr 07 02:06 AM

[Conan the B...:]

Not to worry, go with DZZ as Gold approaches $900 to $910 as part of a Dead Cat Bounce.

The Fed's 3/18 plan should have kept Gold up. It hit a wall instead. The G20 Nonevent should have sent it up, it cratered some more, the Bank Sell on Monday? Missile Launch?

A little USD strenght, Gold down on what has to have been normally good news for Gold.

Mobius thinks last Oct/Nov lows will hold if the Markets Correct from here. He also believes Gold will also revisit those Lows...that's $700 not $860.

BTW, while FASB 157 will do nothing for Bank earnings, it will increase Tangible Assets tremendously. The next 2 weeks will be filled with Financial reports. IMHO

Apr 07 03:32 AM

[Cesato:]

Momentun is supporting the downtrend in Gold, as expected; it won't be a one way move down but rather a roller coaster with a lot of volatility at least for the 2 next cycles, however our target at USD 785 is looking more achievable so I'm actually lowering it down to USD 760. If you look at the charts the multiannual lows have been increasing by USD 100 per year, it was USD 560 in 2007, USD 660 in 2008 and why could it not be USD 760 in 2009? I still believe that we are going to have to wait until Oct 2009 to see that USD 760 become a solid support and then build up an aggressive acumulative position for the next 2 years. Meantime, volatility will be high and a broad range between USD 850 and USD 950 will be the standard till July 2009. Playing the volatility in the fortnightly cycle will be very rewarding until when a clear signal for either a long term position or long term physical buying is given by the market. Beware of Goldbugs they don't know the word SELL and it is constantly reflected in their analysis and comentaries, hence their ability to make money short/medium term is quite disappointing, don't trust my word just look at the spot price USD 150 (or 15%) lower than the 110 weeks high.

Apr 07 09:13 AM

[unrepentent:]

Mine Production went down went fuel shot up last year.

As Financial crisis grew there was a tremendous shift out of equities to safe stores of value and gold coins actually became scarce.

As economies failed, households failed, used gold jewelry was dumped onto the refiners market. At the same time India's gold season was a failure economy.

Few foreign gov'ts have sold their allowed store of treasury gold.

Folks...a market flooded with anything will react and the world gold market is flooded with available gold albeit at a high current price.

Apr 16 02:52 PM