In my Post I warned you of Gold’s demise that is happening.
Quote:”…which is why we must watch the 1520 level or so in gold, if that gives way, there is a lot of danger below.”
The warning was a warning of a lack of support. Meaning if it fell, we would go down quickly. But even I was surprised by how quickly it occurred.
Fortunate are those who heeded my warnings.
Well, I also warned about 2 levels of support below that it would test quickly. Both of them had a lot of high volume in those areas making them a prime candidate for support/resistance zones.
The first being somewhere around the 1400 area. Yes, we are there. Stay tuned, this may hold. However, if it does not, we do have another volume pocket/GAP to the next level
The next is $1200. I expect this to hold. Finally just above $950, should this be gold Armageddon.
Gold is a market like many other commodities. Forced liquidation can happen.
If you have puts I hope you would take profits sometime today. But I think this is good news for the gold market long term. The weak longs must be shook out for bull market to resume. Sometimes that shakeout must be very violent such as the ’87 crash being the most extreme example.
No I am not some hypocrite like I was long Bitcoins and now I am saying face after a 75% decline by saying it’s a “shakeout for crybabies” like the Norm McDonald sounding character, Max(imum) “boom boom” Keiser. I am not a permabull or bear in anything. Markets always rotate and never go straight up forever. I got this exactly right. The structural damage is indeed severe, but right now I look at this as nothing more than a panic. While bitcoins will be shut down by the government someday, and gold can be seized by the government (along with your Cyprus bank accounts), Gold at least represents an international medium of exchange that can be used. If the government mismanages the money supply, globally currencies may shift. The fundamentals behind gold are no different. Nor were they when gold declined from 1980 until 2000 by something like 90% adjusted for inflation. In my view, you must understand where money is moving and WHETHER OR NOT THERE ARE/WILL BE BUYERS at a given level to be able to accurately measure risk and reward.
I am not trying to call the bottom right here, but I applaud the people bold enough to step in and do so. It certainly is a very oversold market right now. There is certainly support around these levels as well, it’s the levels below I am concerned about.
Right now the risks are pretty neutral in terms of about a $200 volume pocket upwards and downwards. The momentum is down but we are oversold. However, as we decline as I write, that is becoming more favorable to the upside. If you want to tell me you can predict where it goes next be my guest.
I personally sold the last of my GLD puts here with /GC at 1365. Good luck to those who still have a position either way.
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