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Gold's Next 10% Move Is Down, Not Up

Scorpio

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#1
Gold's Next 10% Move Is Down, Not Up

By Chris Vermeulen Follow | 03/07/16 - 10:30 AM EST


Gold has been on a tear since the start of this year. It is one of the best performing assets so far with a 16% rise in two months. However, if you are planning to enter gold at these current levels, you are likely in for a big surprise. Gold is overbought and technical analysis is pointing to a drop in gold price to the $1,150-per-ounce level, a good 10% lower from current levels.

The equity markets are in a bounce-rally mode and likely to remain buoyant till end of March. Oil prices, which were causing a scare worldwide, are also on the mend, and the bottom is likely in place at $26-per-barrel.

The jobs data from this month has given a green signal to the Federal Reserve to move ahead with the next proposed rate hike. Whether we see a hike this meeting or next is difficult to assess, but the U.S. Dollar will likely trade with a bullish bias as long as the chance of a rate hike remains on the table.


A strong dollar dims the sheen on the yellow metal, if the dollar continues to remain strong, gold will likely come off towards our target low area of $1,150.

Technically, gold has risen from its lows without any retracement, as shown in the chart below. Though gold has broken out of its long-term downtrend, market participants should remain cautious on it. Many bulls will want to pocket their profits as gold is nearing a resistance area. The bears will enter shorts closer to resistance. With both of these events coinciding together, gold will retrace back to its breakout level.

The bulls will buy closer to $1,190, which was the earlier resistance, they will attempt to defend the level and support the market. The market can either take support at $1,190 or drop down towards $1,150 area to shake out many long positions before rising again.



http://www.thestreet.com/story/13484979/1/gold-rsquo-s-next-10-move-is-down-not-up.html
 

nickndfl

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#2
I hope so and been patient. Wait until the FED raises rates and spooks the stock market too. So be it.
 

platinumdude

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#3
Well, time will tell. If people really knew, the price would already be corrected in.
 

latemetal

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#4
With the GSR as high as it is, a correction would be welcome....
 

FunnyMoney

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#5
A break below the 1180 area would spell danger but it appears the flavor of things is for continued strong, safe haven buying for the rest of this year. I'm expecting 1380 before any push back but not staking a claim on that just yet. We may see a range develop instead. The range would be 1140 to about where we are right now. If we push above 1300 over the next month or few, then that range would need to be re-examined.
 

Scorpio

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#6
It will eventually come as the seasonal winds down,

Don't know where that will be yet until we top out but to give back 100 bucks is a nothing burger in the big picture,

If that is what it needs to set the table, that is fine.