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Simit Patel's  Instablog

Simit Patel is an individual currency trader who focuses on analyzing the EURUSD exchange rate. He previously spent four years working as a currency broker and analyst; he currently is a contributing analyst at InformedTrades.com (http://www.informedtrades.com), where he offers commentary about... More
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  • Time to Sell Gold? 2 comments
    Apr 7, 2009 11:14 AM | about stocks: GLD

    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.

    Themes: gold, economy Stocks: GLD
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This post has 2 comments:

  •  
    Simit,

    What say you about Silver?
    Apr 07 12:15 PM | Link | Reply
  •  
    IMF selling 400 tons has a very chilling effect on the precious metals. Some see it as a time to bail. Others as a chance to get more cheap. A person has to decide if he wants to be 4 years down the road and all of his gold has been sold for small quick profits or does he want to have something that is much more valuable than a small profit stream that has been invested (or pissed away) in what?

    Gold should be a portion of your portfolio for that really bad event that we keep flirting with and its still lurking around.

    Keep gold/buy more on the cheap

    I am long physical gold 10% and another 10% paper. The rest I have invested foolishly.
    Apr 07 01:30 PM | Link | Reply
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