By: John Fisher, with content from CNBC
Gold sold off sharply this past week breaking below its December low of $1,360 on Friday, January 7th before recovering some of those losses.
As one financial commentator quips, “gold takes the stairs up and the elevator down”, and we’re seeing those moves now.
The spot price of gold closed in negative territory on Friday for a fifth consecutive day, its longest losing streak in seven months – down about 4% on the week.
On the charts, gold has breached below two important support levels – its 50-day average at $1,382 and its December lows in the $1,360’s.
CNBC’s Fast Money recently interviewed one of the most followed and esteemed commodity traders in the nation, Dennis Gartman, author of The Gartman Letter.
Click here to watch Dennis Gartman’s 3 Minute Video on CNBC
He tells us all the excitement about the declines “is a lot of tempest in a pot of tea.”
He goes on to say, “Gold moved from $1,430 to $1,365 and everyone is screaming how serious the gold decline is. But if a stock went from $14.30 to $13.65 would they be as excited? No. But it’s the same percentage move.”
The gold short-term decline may not be over.
Can gold go down more? It’s certainly possible.
This correction could certainly last a couple of weeks.
Has the bull market in gold has ended? Not really.
In fact, it’s just now hitting its stride.
All Things Considered – John’s Commentary:
Action to take now: You are probably reading articles in papers and magazines questioning if gold has bubbled. Such sentiment is a buying signal.
Two rules:
1) Invest with the primary market trend
2) Act opposite of the masses.
Gold is currently presenting a buying opportunity.
What to buy: Ultra low premium gold medallions and Austrian/Hungarian coins. 90% pre-65 silver coinage is the runaway best buy in silver.
Quote of the day: “Every individual is a potential gold buyer, although he may not need the gold. It may be added to the store of personal wealth, and passed from generation to generation as an object of family wealth. There is no other economic good as marketable as gold.” – Hans F. Sennholz
