According to the technical chart of gold, gold is at a bargain, according to one expert. The current dip in gold is only a bump in the road for the long bull market the metal has ahead. The metal has only dropped for its recent highs to get back to a more suitable rate of change.
by Steve McDonald
Tuesday, October 4, 2011
Gold is at a bargain – at least that’s what technical analysts are saying.
The techies described the recent 20-percent dip in gold prices as a bump in an otherwise long bull road for gold… and the charts support this claim.
According to Michael Kahn of Barron’s, the sell-off is exactly what you would expect from the “parabolic” rise gold has had since last July. This isn’t the end of the run, but a short rest.
Kahn described the recent dip in gold as allowing the metal to get back to a more sustainable rate of change.
He also thinks gold is in better shape than silver, and both are in better shape than the respective miners.
Two factors don’t seem to be going away:
- Investors lack of confidence in the U.S. government and the Fed’s ability to do what’s necessary to get the economy going again.
- A worldwide lack of confidence in paper money as political promises in the EU and at home don’t turn into actions.
For gold, this is a buying opportunity.
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