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Off 1.3% to $1,535, gold is at its YTD low and looks to be testing a key support level hit in...

  • Wednesday, May 16, 2012, 7:55 AM ET
    Off 1.3% to $1,535, gold is at its YTD low and looks to be testing a key support level hit in September and again in December. Beneath that looks to be a lot of air. It's more volatile cousin silver, -2.4% to $27.40, is forming a similar chart pattern.
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This news story has 15 comments:

  •  
    A great "once in a lifetime" buying opportunity will present itself around 1,450 for gold.
    Printing phony money and the free world swallowing it - should make a good book and movie 15 yrs from now?
    16 May 2012, 08:40 AM Reply Like
  •  
    How could it be once in a lifetime when it was cheaper than that just a few years ago? Maybe for the set of people who are only a few years old and in the market to buy commodities?
    16 May 2012, 10:41 PM Reply Like
  •  
    I agree with the potential short term weakness and the support point mentioned above. I would anticipate a downward moved to that support point during the first half of the summer. Biggest risk factor in commodity pricing to be another round of QE by the U.S. in response to a QE frenzy in the EU increasing overall available liquidity.

    For a long position, I would anticipate gold returning 5-10% over the long term (i.e. 10-20 years) and function in response to gradual inflation and fiat money weakening. The 1400's do look very appetizing for a buy-in position, but I would stay away from initiating long positions until a new support point is reached.
    16 May 2012, 09:02 AM Reply Like
  •  
    Gold does not always follow the "traditional" chart patterns, the fear factor and $US strength are probably the two most important movers.
    16 May 2012, 10:30 AM Reply Like
  •  
    What I don't understand though is why the dollar is seen as a safe haven. It's leaping away from the crocodile and into the jaws of the shark.

    If they put their money in the US, don't they know it will be nobbled away by high inflation and money printing. Gold is the ultimate safe haven.
    16 May 2012, 01:58 PM Reply Like
  •  
    The simplest way to put it is that gold has to have value relative to something.

    Currencies are valued versus other currencies and gold has a value versus other currencies as well.

    Now consider what happens to the value of gold when the value of most of the worlds major currencies are losing value versus the dollar.
    16 May 2012, 02:19 PM Reply Like
  •  
    It is akin to having the nicest house in a bad neighborhood.

    That is the best way to describe the Dollar as a safe haven.
    16 May 2012, 03:42 PM Reply Like
  •  
    At these levels with gold you're taking on the risk that your investment loses 75% of its value rapidly.

    In the long term gold will outperform cash, but it is always riskier in the short term, and at these levels incredibly risky both short and long term.

    Look at it this way, the dollar will suffer from inflation but has 0% inflation baked into its current price levels.

    Gold will avoid inflation but has 400% inflation already baked into its current price levels.
    16 May 2012, 10:41 PM Reply Like
  •  
    Just wait until after the election; it could be a new ball game. All the old numbers and theories will have to be revised if B.O. is re-elected. Many bad things could happen quickly.
    16 May 2012, 02:44 PM Reply Like
  •  
    Do anyone know the curcumstances that have to occur before gold will be considered safe to invest in again?
    16 May 2012, 05:02 PM Reply Like
  •  
    It is unlikely gold will fall below $1500 and if it does it will not be for long. Sense will prevail. All true bull markets experience max swings of 30% or more on the way up to shake off the doubters, we have c.-20%
    now and it should be seen as a time to start adding to your position. The fundamentals have never been more solid. The $ will crumble to dust in due course along with the rest of the fiat currencies.
    16 May 2012, 05:41 PM Reply Like
  •  
    The price of gold is not really down, it is down relative to the $US, but vs the Euro and many other currencies, it is even or up.
    16 May 2012, 09:54 PM Reply Like
  •  
    Gold would need to revert to its mean inflation adjusted price level to be a good deal for wealth preservation.

    For wealth appreciation, below the mean inflation adjusted price.
    16 May 2012, 10:41 PM Reply Like
  •  
    China and India buy 500 tons of gold + - per quarter the U.S. buys none!
    We are buying 60+ % of our own debt - huh? How does one buy their own debt? Easy until the suckers won't take your monopoly money - Oh! Oh! - then what?

    Please send me the name of the person that told Obama that we can spend our way out of debt?
    17 May 2012, 09:36 AM Reply Like
  •  
    Paul Krugman told him.
    17 May 2012, 09:42 AM Reply Like
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