Current gold market
Posted by ML on October 25th, 2006
I was heartened by gold’s price action over the last three days seen in the price chart from Kitco below. From a high near $592 on the 23rd, it dropped nearly $19 to a low near $574 on the 24th. It then almost recovered all the way back to $592 today (25th). Gold stocks, as represented by the HUI, managed gains during this turmoil in the physical market, culminating in today’s 3% move to 316.13. This speaks loudly of some persistent buying in PM stocks.
Click to enlarge
The PM correction from the May highs has been quite painful. The “throw-over” move at HUI=369 got many people, myself included, I’m apprehensive about calling a bottom. Indeed, I’ve been fully invested in PMs and determined to ride out the rest of this correction. There is a cluster of fibonacci retracement levels and moving averages in the 320′s. Since the HUI is nowhere near oversold, it needs to get over those levels to show this rally has legs.
This is not investment advice, all usual disclaimers apply.
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October 25th, 2006 at 9:17 pm
Chris Laird at financialsense.com who was right about the recent gold downturn correctly is still calling gold to fall to $500 to $550, but qualified by a war with Iran. I am still neutral on gold. I don’t believe gold will fall to less than $525. I also think that war with Iran will occur after Feb 2007.
October 28th, 2006 at 12:24 am
Why do you think war will not occur until after 2/2007? I’m to the point where I just want silver taken down so I can buy more silver eagles. I’m thoroughly convinced it will skyrocket in the future, though hopeful I will have more accumulation time.
October 28th, 2006 at 11:01 am
Novice,
I will write a post to answer your question on this. But certainly, no one can possibly predict the timing of war with a high certainty, unless you are Mr. Bush, or close to the inner circle.
By the way, I found out that for silver coins, there are always some coinage premium of some 15% or more. I’m considering buying 100 ounce or 1000 ounce silver bar instead now to reduce the premium over silver spot that I will pay.
Best luck.
November 6th, 2006 at 5:09 pm
Dear Novice,
Check out my guide to investing in gold and silver bullion:
http://investmiddleway.blogspot.com/2006/04/guide-to-investing-in-gold-and-silver.html
I’m more bullish on silver than on gold but timing shouldn’t be an issue for buying bullion which should always be a LONG term hold.
ML