Gold's Short-Term Uptrend is Broken

Below we highlight a long-term and short-term price chart of Gold. As shown below, the commodity is in a long-term uptrend that still remains in good shape. However, the short-term uptrend that formed when the sharp rally began last June has recently been broken. The next level of support is at the $850/ounce level created by the November '07 highs and January '08 lows.

click to enlarge

Comments

[Ames Tiedeman:]

Let Gold pull back to $750 so it can then double to $1,500.00. All of this liquidity being flooded in will cause a 1970's style inflation. Give it time.

2008 Apr 01 06:18 PM

[Philly Jim:]

Gold is pulling back because there is a lot of talk that commodities are the next bubble to burst, but this bubble wasn't created due to psychological phenomena like we saw with the Internet and housing. There is actually huge demand out there, look at what a lot of these countries are starting to do like halting all exports of certain commodities so they have enough to feed their own populations first. I'll keep my bullion but may sell my gold stocks until this bubble fear subsides.

2008 Apr 01 08:06 PM

[Brian in Mo...:]

Hopefully back up later, but like the Dollar did, now gold has broken short term support. \i mentioned on another article, it's been fun shorting the gold stocks after Asia buys Gold and New York starts selling it.
My amateur take at the coffee machine was that the same guys who pushed up google to fast, did the same thing to Gold and Commodities. These markets are probably childs play for the big boys in New York. So look out if they decide to get back into Google, Rimm, and AAPL .Cheers, Brian.

2008 Apr 01 08:17 PM

[Bhakta:]

I agree it is all market manipulation by the big guys on W St, The Fed and the US Treas. Dr. Marc Faber said as much in his latest March market commentary. Said he cannot predict anything on the markets because they are all being manipulated.

2008 Apr 02 05:52 AM

[NOWHEREMAN:]

Gold has good support at 850....but support doesn't mean squat...traders will try to go below to panic the small fliers or hold above to panic the short sellers.

Parallel lines are parallel by definition PERIOD

What scares me is the 10 year S&P comparisons of 1968 thru 1978 (last Bubble prior to the current comparable Bubbles) and 1999 thru present and ongoing...

in the 70's gold went from 35 to 800 plus, oil from 3 to 40...we have a ways to go before this Bubble will actually be a BUBBLE, especially after 30 years of inflation. Besides, Bubbles are not called by a vast number of people. They are perceived to have been Bubbles after the fact.

2008 Apr 02 09:34 AM

[dmvsmart.com:]

As always, it's perceived. The 10 year S&P comparisons of 1968 thru 1978 are perceived bubbles created due to psychological phenomena

2008 Apr 02 10:35 AM

[Anshul Shah:]

Or can it because the IMF is selling gold, since there is now an increased supply it would be obvious that gold will retrace. Bespoke has been bearish on commodities for a while, but i seriously doubt the commodity boom is over. I mean just look at the emerging countries esp ASEAN and Indian Subcontinent. Furthermore do not leave Africa etc

2008 Apr 02 11:17 AM

[mkreisel:]

Gold is down because too many dumb-money speculators have jumped on board. Many of them need to be shaken out before gold can continue its advance.

2008 Apr 02 09:20 PM

[sammyg123:]

I agree with the article. We still have to go through the "return to normal," fear, capitulation, and despair psychological phases before we return to the mean.

2008 Apr 03 01:34 AM