By John Fisher
Monday, May 24, 2010
The chart might look messy, but it is pretty straightforward. As my wife always requests, “The bottom line analysis please?”
Summary of the Chart:
Gold in US dollars closed moderately higher yesterday, coming off recent lows for the short-term mid-May downtrend. The technical indicators remain moderately bearish. However, the Relative Strength Index (RSI) has turned upward from recent lows in negative territory.
What’s Ahead:
A close above the recent high at $1,240 would confirm the long-term breakout of the gold market and suggest additional gains. A close below congestion (support) near $1,182 would mean more short-term downtrend from last week. This could lead to the next level of support near $1,160.
Action to take now:
I would buy at $1,182 and again at $1,160 – and if it ever came to it $1,120. In the past, summertime in the metals was slow. We are in a different part of the bull market – namely stage 2 often referred to as the “Wall of Worry”. Again, don’t try to pick a bottom – it never works. Invest modest amounts steadily over time and carry a diversified investment portfolio.
What to buy now:
Low premium gold and silver bullion. Don’t fall for the marketing gimmicks of the large television telemarketers. Always remember that no matter what you bought or how much you paid for it, when it’s melted down, it all looks (and is worth) the same.
Quote:
“The end of an empire always comes when the currency is destroyed.” – Congressman, Dr. Ron Paul
