June gold was $2.40 lower at $398.80 in midday trade Tuesday as the US dollar index rallied to retest its recent highs on expectations that the US Federal Reserve Board would raise rates off their 48-year low. The market traded as low as $396.30, a near retest of both the $396.20 low from Thursday and the $396.10 low from March 12. We view this as pivotal support, with failure to hold leaving just the $389.00 low of March 3 between gold and a more substantial decline to projected support first at $374.00 and then again at $362.00. June faces nearby resistance at $402.00 and again at Monday's $406.50 high. Recent consolidation is most likely a bear flag or pennant continuation pattern and the head-and-shoulders top between $414.50 and $433.00 is looking more and more like major resistance.
yeah, gold can tank to $364 I think...but these gold stocks are still holding up..that is bullish for gold. IF $389 is broken to the downside in gold..it could get ugly, but guess what? I believe that Wall St. is in denial about the 100% chance of a rate hike in August. If short term rates go up, stocks, bonds, and a bunch of other commodities will all go down with gold, ie. deflation. If the Fed actually keeps rates flat in August, gold could really get going. Kind of like TASR when it based out at $50 before it added another $80. Gold usually doubles in the last push of a big trend so I do not think that Gold is going below the $200 mark for a long long time. I'm not convinced that the yearly uptrend for gold is finished yet. Inflation adjusted, the $200ish bottom in gold that we have seen is only $10 in 1929 dollars. In the great depression, gold went to $20. So we have already gone below the 1929 gold low in inflation adjusted dollars. Although deflation is a possibility, I think that there is a higher probability that gold will go ballistic to the upside since it broke out of a 25 year old bear market. I'm a young guy, and I still think that at some point in my lifetime, I have no idea when. It can be tomorrow, 5 years from now, 10 years from now, but Gold will rip above $1K/ounce, and quite possible above $3K/ounce since the inflation adjusted 1980 top is over $3K/ounce. If there is a terror attack, it would be a great opportunity to sell gold and gold shares, but not necessarily go short gold. If there is a nuke, or chemical attack in the states, then you want to hold all of your gold, and go Charles Bronson style and shoot anybody that comes within 100 feet of your home. That is just my humble opinion.
Looks to me gold and gold shares will break to the 360 area....most if not all gold shares are trading below their 50 sma..The Eur/usd seems to be heading to the 1.16/1.15 area...then another run for both