Tuesday, September 27, 2011

Gold ~ Update ~ 27 September 2011

I haven't posted long-term gold charts for almost ten months. Back on January 1st I wrote that we could see a small correction in gold but that we should be higher at the end of 2011 and that I didn't see a gold bubble yet.

So far this has worked out pretty well, we got the rally and also a correction but we're higher than at the beginning of this year.

After the most recent drop in gold almost everywhere one could read that the gold bubble burst (for like the 3510th time I guess). Just have a look at the long-term chart above...

That's one of the most bullish charts I've ever seen and there's just no reason to short it neither technically (the uptrend line is still holding) nor fundamentally (the FED and the ECB still want to solve the debt problem by creating more debt...).

So, long-term I still expect much higher prices (unless of course the FED/ECB etc. decide to solve the debt crisis by saving money and not by spending more... (not gonna happen though imo)). I don't have any specific price target though... just go with the trend and let's see how high it goes ; )

After gold broke out of the triangle at around 1840$ it declined about 300$ and bottomed right at the orange uptrendline and as long as it holds the medium-term trend for gold is up.

Short-term we might have seen a bottom on Monday (maybe even medium-term). We got a huge hammer which is usually a sign of a trend change:

To sum up, as long as the FED wants to solve the debt problem by creating more debt gold should go much higher (long-term). Medium-term the uptrend is still intact and short-term we may have seen a bottom on Monday.

I prepared two other posts (spx & silver). I'll post them a bit later though.