Gold topped out last September, almost a year ago. It topped out upon reaching a new record high at $1,900 an ounce, which created lots of excitement and forecasts of $2,500 gold, $3,000 gold, being just months away. That’s not what our indicators were showing.
And instead gold plunged $365 an ounce to its low in early January. That’s a decline of 19.2%, just shy of the 20% that in the stock market would be considered entering a bear market.
It rallied back $250 an ounce in February, where it failed again, and at a lower high.
Was that just a bear market rally? There are those who believe gold is in a bubble after surging up over 600% since its low in 2000.
We prefer to time gold on its intermediate-term moves.
And right now the consensus of our indicators remain in the Feb. 19 sell signal, and so far gold’s attempts to rally since have failed at its important 30-week moving average. That m.a. was previously solid support on pullbacks, but it has been potentially establishing itself as important overhead resistance since February.
However, some of the technical indicators we use on gold have improved lately, which has our attention, and watching more closely for a potential buy signal.
We shall see. A recent issue of Timer Digest showed us as #2 in the race for Gold Timer of the Year, so we have extra incentive to also get the next signal right.
Subscribers to Street Smart Report: The new issue of the newsletter is in the subscribers’ area of the Street Smart Report website from yesterday afternoon.
To read my newspaper column from last weekend click here: Central Banks Revealed They Are Now Impotent’, August 3, 2012. [rate]
Images: Flickr (licence attribution)
About The Author
Sy Harding publishes the financial website www.StreetSmartReport.com and a free daily Internet blog at www.SyHardingblog.com. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!