Time to Sell Gold?

With gold falling below $900, many perma bears and gold bugs are asking: what's going on here?

Let's start with the chart below, which shows the past four years of gold's price history. The first level at which I'd look to re-evaluate conditions is $770, which is clearly a pivot point and is also where the 38.2% Fibonacci line is at for the gold rally from $400 to over $1,000.

Personally, I view gold as a bit like saving and investing, and simply accumulate gold when I can, and plan on continuing to do so for the perceived length of the long-term bull trend. However, I may try to add more or take profits around key price levels.

Fundamentally, the long-term case for gold is only getting stronger. Political instability is the key barometer: the more political instability there is in the world, the stronger the case for gold. Our current world, with increasingly vulnerable fiat currencies and controversial fiscal policies, suggests the bull market in gold is just beginning.

Disclosure: Long gold

Comments

[Conan the B...:]

Why chose $770?, that particular price based on Gold's move from $400-1,000 was taken out when it dropped to $700 in 2008.($600 times .382)

The current move is from $700 to $1,000 or $300. Applying .382 is meaningless since it broken through that already. Applying .618 however, is a $185 drop which would imply $815. Just curious.


Personally, I'm hoping it reaches neither target. $830-50 would be more than adequate.

Apr 08 03:36 AM

[Tom Szabo:]

The bull market in gold started in 2001 or 2002 with gold crossing $300 or so. A tripling (2x return) from current levels is certainly possible but that would be an 8x return for those who have held since the start. In other words, the easy money has already been made. It is acceptable to accumulate a core holding (and that means physical metal in your own possession) of 10% gold and silver in your asset allocation without regard to price but beyond that you are speculating. Even if higher gold prices seem like a slam dunk given the "vulnerable fiat currencies and controversial fiscal policies". Don't get me wrong, there is absolutely nothing wrong with gold speculation other than calling it "saving and investing". For the record, I do believe gold will go much higher at some point sooner or later but if your "savings" will be going to pay living expenses in the next couple of years then buying gold at $900 could hurt you.

Apr 08 04:53 AM

[DONE_SONZ:]

Simit,where have you been?I like your posts.

Apr 08 08:32 AM

[capt Brian:]

Ho Hum... look pilgrim, why can't anyone keep this simple? When times are good, any old paper money in a box is absolutely wonderful. When times are bleak, and outlooks not so rosy, then put some into real money. Go out and buy one ounce of nice shiny silver, in a pretty burnished Eagle, and do the same for a Gold one ouncer, nice shiny eagle to sit on the limb with your new silver song bird. THERE NOW, doesn't that feel good for some reason? NOTE: if u have them sitting on the shelf, just once put them in the palm of your hand together, clink them a few times in front of a mirror, then surprise yourself by looking in the mirror ONLY after you clinked for a coupla seconds. NOW lQQkit ur face. Bet you have a grin. Go ahead, only cost you about $900 for one of each if you don't wait too long.

Advise from the BRIDGE..

Apr 08 01:07 PM