Gold’s current slump began in late November and accelerated in December. Ever since late that month, it has been inexorably grinding sideways and trying traders’ patience. Gold has indeed been fairly weak in that isolated time-frame.
But the big picture of what led into this recent consolidation reveals it is actually quite bullish. Considering gold’s technicals in longer-term context quickly dispels the current fears.
When a price drifts listlessly like gold’s has recently, traders’ bearishness grows with each passing day. Eventually they throw up their hands in disgust and capitulate, figuring the bullish case must have been wrong. The recent poor price action dominates their minds, that’s all they can think about.
But zooming out to get more perspective frames gold’s slog quite differently, as a consolidation within a young upleg.
Read entire article by Adam Hamilton here:
…The bottom line is gold remains in a young upleg today despite the recent months’ vexing slumps and drifts. It has carved higher lows and higher highs despite the adverse sentiment environment, its current trend is definitely higher. While traders are all caught up in how crappy gold has felt in recent weeks, the bigger picture is far more bullish than most give gold credit for. Maintaining perspective is utterly crucial.
With traders being fed up with gold and very discouraged, and it being very oversold, this metal is overdue for an imminent major rally. Some catalyst is going to arrive very soon that will spark serious buying as gold shorts rush to cover their positions. Maybe it will be the US stock markets rolling over, maybe it will be Europe woes, maybe it will be something else.
But technically gold is due to surge.
FEBRUARY 17, 2013 BY THE DOC – Silver Doctors