We have updated our privacy policy and terms & conditions. Find out more here.

Gold Watch: How The Next Upswing Will Play Out

By CommoditiesDec 19, 2012 06:50PM GMT
Gold Watch: How The Next Upswing Will Play Out
By   |  Dec 19, 2012 06:50PM GMT

In the last 10 weeks gold prices have depreciated 7% and as seen in the above chart, are again testing their 200-day MA: identified by the light blue line. The last time this pivot point was challenged in early November it held but will this time be different? You can see on the daily chart that yesterday this level was probed and as of this post we are at that critical level for a second time. If it gives way, which I think is a good possibility, solid support comes in at $1650, which is a long-standing trend line and a congestion area dating back the last 10 months.

Bears Should Rethink Position
Traders that are currently in bearish trade should consider reversing their position if the opportunity presents itself at that level. My stance is that gaining bullish exposure into 2013 is a great swing-trade opportunity. I think we will challenge the $1800/ounce level next year. My favored plays are bull-call spreads or gaining long exposure via futures with options protection.

As for the global printing presses running on overdrive, I expect gold to continue its appreciation for years to come. The level of inflation that I think is possible if we stay on this course is unfathomable. The trend being higher for over a decade also helps the argument why most investors should have some sort of gold allocation in their portfolio expecting appreciation not today or tomorrow but in the quarters and years to come.
Gold Watch: How The Next Upswing Will Play Out

Related Articles

Gold Watch: How The Next Upswing Will Play Out

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Add Chart to Comment
Are you sure you want to delete this chart?
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?

Successfully Reported

Thank you. This comment has been flagged for a moderator.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.