Sometimes, a simple technical analysis paints a clear picture. Three weeks ago, we wrote that Gold was running a bit too hot and had gotten overbought. We recommended taking some profits or hedging some of the gold and precious metals positions. It was timely because Gold proceeded to correct about 8%.
The chart above of GLD illustrates how that short-term correction unfolded and how prices went down to the 50-day moving average (blue line). The fact that it held points to the fact that Gold remains in a healthy bull market. Considering our economic uncertainties, Gold should start another leg higher, taking the prices to the new all-time highs.
Dennis
