We have seen gold drift slowly higher today, though the action is not encouraging for the bulls. It seems likely that our assertion this morning that gold looked likely to break down again will prove to be correct.
The "rally" in gold is not impulsive, the price is chopping and overlapping as the yellow metal moves slowly higher - this is indicative of a corrective phase and, considering the massive price drops of the past few days, the interest in bargain hunting is clearly pretty feeble. We would have expected a much more robust response from the bulls and a powerful bounce if this was a temporary setback.
We are hearing many reports of local bullion dealers being overwhelmed by purchasers - this worries us, as the retail investor is almost always wrong. The fact that such huge numbers of small players are piling into the metals, whilst big players like George Soros have recently been selling their gold, speaks for itself in our opinion.
Whilst we still think the gold bull has some way to run, it also seems clear that the price needs to drop some more before the sentiment becomes bearish enough to deter the bulls, particularly the retail investors.
We may be wrong, this is just speculation and we trade by the charts, not by what we feel. Oil is down again today, as are equities, and the dollar is up sharply - the deflation scenario looms large.
We are hearing many reports of local bullion dealers being overwhelmed by purchasers - this worries us, as the retail investor is almost always wrong. The fact that such huge numbers of small players are piling into the metals, whilst big players like George Soros have recently been selling their gold, speaks for itself in our opinion.
Whilst we still think the gold bull has some way to run, it also seems clear that the price needs to drop some more before the sentiment becomes bearish enough to deter the bulls, particularly the retail investors.
We may be wrong, this is just speculation and we trade by the charts, not by what we feel. Oil is down again today, as are equities, and the dollar is up sharply - the deflation scenario looms large.
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
