The Big Golds - How Far Will They Correct?...
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A correction in the Precious Metals sector had been a growing probability as it had powered higher week after week. Now, last week’s action demonstrates that it is upon us.
Gold did not break appreciably higher when silver broke out towards the end of January, and instead crept higher, held in restraint by a long-term trendline shown in the latest Gold Market update, before finally buckling last week, no longer able to stand up to the dollar’s increasing strength, forewarned of in the Bin Laden article some weeks back. Gold has risen very steeply recently, and is running a huge gap between its 50 and 200-day moving averages. Common sense dictates that it is vulnerable to a significant reaction here, and should this come to pass a corollary of this is that the big gold stocks, which are still very overbought, could give back a sizeable percentage of their recent gains fast. How much? - the following charts are intended to give you an idea.
Clive Maund, Diploma Technical Analysis
Kaufbeuren, Germany, 13 February 2006
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Clive P. Maund’s interest in markets started when, as an aimless youth searching for direction in his mid-20’s, he inherited some money. Unfortunately it was not enough to live a utopian lifestyle as a playboy or retire very young. Therefore on the advice of his brother, he bought a load of British Petroleum stock, which promptly went up 20% in the space of a few weeks. Clive sold them at the top…which really fired his imagination. The prospect of being able to buy securities and sell them later at a higher price, and make money for doing little or no work was most attractive – and so the quest began, especially as he had been further stoked up by watching from the sidelines with a mixture of fascination and envy as fortunes were made in the roaring gold and silver bull market of the late 70’s.
Clive furthered his education in Technical Analysis or charting by ordering various good books from the US and by applying what he learned at work on an everyday basis. He also obtained the UK Society of Technical Analysts’ Diploma.
The years following 2005 saw the boom phase of the Gold and Silver bull market, until they peaked in late 2011. While there is ongoing debate about whether that was the final high, it is not believed to be because of the continuing global debasement of fiat currency. The bear market since 2011 is viewed as being very similar to the 2-year reaction in the mid-70’s, which was preceded by a powerful advance and was followed by a gigantic parabolic price ramp. Moreover, Precious Metals should come back into their own when the various asset bubbles elsewhere burst, which looks set to happen anytime soon.
Visit Clive at his website: CliveMaund.com
