-- Posted Thursday, 30 April 2009 | Digg This Article
| Source: GoldSeek.com
June Gold: Open= 898.6 High= 900.8 Low= 880.1 Last= 888.5 -11.9
Gold bulls must feel some disappointment recently with the poor performance of the yellow metal. A weaker US dollar, a possible pandemic, and a host of stronger commodities have been unable to support prices in the past week.
A probe below $890 was rejected today but prices still linger right around $890, which was a resistance level just over a week ago. There has been buying support of gold around this level and the fact that the market rallied $10 off the lows today shows there is still buying interest. But is it a losing battle?
Money seems to be flowing towards stocks and certain commodities that appear undervalued. It would be a tough argument to make that gold is undervalued in terms of dollars. Certainly, there are valid arguments to make about the price index to inflation and the possibility that $900 gold will be cheap a few years from now.
Unfortunately, in a bear market, the outlook doesn’t reach that far. Inflation is simply a theory at this point and the market has already priced in anticipation of inflation. The rally from $680 to over $1000 was the anticipatory rally. The market may not rally hard again until confirmation of inflation.
Since the short-term trend in gold is down, and still can be defined as a correction, bulls ought to wait for confirmation of strength before getting long. Buyers should be looking for a close above $916 before getting long. A break below the double-bottom at $865 would suggest a leg down towards the $820 level.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
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Thomas Hartmann
Altavest Worldwide Trading, Inc.
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-- Posted Thursday, 30 April 2009 | Digg This Article | Source: GoldSeek.com
