Entering text into the input field will update the search result below

Gold In The Danger Zone

Apr. 09, 2013 7:57 PM ETGLD6 Comments
John Lounsbury profile picture
John Lounsbury's Blog
55.4K Followers
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The Daily Reckoning has an informative chart today, although I do not agree with the conclusion they emphasize.

It is true that 1,550 is a strong support level for gold. But it is not the last defense. There are support levels at 1,480 and in the 1,300s.

Some time ago I looked at long-term uptrend support lines for gold.

Taking a longer view, let's look at a 20-year perspective with a graph presented last year:

You must extrapolate almost two years to the right to get to today. If you eyeball that extrapolation the five-year trend line support is in the vicinity of 1,100-1,120 and the ten-year trend line support is around 1,020-1,140.

Now those levels are 30% to 35% below the current price, but that is where you have to go to say the long-term uptrend for gold is over.

However, if gold does go back to test long-term trend lines, and you hold all the way to that test, you certainly will not feel like you may still be in a long-term bull market.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.