RCM Commodity chart of the day

Weekly Gold

Let’s take a longer term look at gold and see what the tea leaves are telling us. Clearly the trend has been up for the last three years but for the last nine months the trend has been down. In fact prices are nearly 20% off their record highs reached in September 2011.

The darker blue line is the100 day MA and on a breach of that level at $1550 I would not rule out a trade to $1440. This would represent a38.2% Fibonacci retracement o the $1200 move in the last 3 ½ years.

What excites me more than getting short gold in this environment is the prospect of buying at lower prices. If we see a washout dragging gold near $1400/1450 I would recommend being an aggressive buyer. I say this because in the next two years I believe we could see $2000/ounce. I recognize to trade to $1425 is a 10% decline and people say no way but prices have fallen 12% just in the last six months. In commodity trading if you trade long enough you will realize anything is possible.

To discuss in more detail this chart or any other you can reach me at:

mbradbard@rcmam.com or 954-929-9997

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