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GLD has rallied from the bottom of its channel to the top of the channel of late. Numerous times the top of the channel either slowed or stopped a rally over the past year and a half. This time its different?
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Bill…Thanks for the comments, great ones!
Ignore the August rise…Agree we shouldn’t. Shorted Gold within a day of the highs (see post here)
ZSL picked up 80% in a few days, per a decline in Silver. The August/Sept rise was something to pay attention to and profit from.
Silver was a great long earlier this year (see up 25% in 29 days) and has been a great asset to short since it hit $50.
Hi Yo Silver, either way it goes…
Chris
This chart analysis ignores the August / September rise. Statistical analyses never take into account what’s happening with current events that might affect that chart that is being analyzed.
Here we have the euro about to break up, sovereign debt to GDP ratios continuing to climb to new highs, major banks becoming insolvent, central banks creating more fiat money to attempt salvaging those banks and sovereign economies. Then we should believe now is the time to sell gold for fiat money and buy again in a few weeks or months? Where do all those people with financial sense put their money? Euro bonds? US bonds? Stock market that has declined against gold?
I would pay more attention to the August / September rise. If one is going to do a statistical analysis, it would seem to me gold (and silver by extension) will go into a new range.
In any case, I believe wise investors pay attention to what’s happening in the world in present time rather than comparing statistics. We are entering an economic phase the like of which we have not previously seen.
The question is the same critical question whose answer determines the immediate future of every financial product, rate and price.
Inflation or deflation?
Certainly, in the long run, inflation will win out. This is an absolute rule, and applies to all fiat currencies.
But in the short run, the current Euro crisis is deflationary. Debt is being eliminated, which is deflationary (as most fiat currency is created from debt, and disappears when debt is cancelled). Borrowers are unable to roll over their debts, which is deflationary. Unemployment is deflationary. Bankruptcy is deflationary. One of the impacts of all of this is an increased desirability of currency over any debt-based investment such as bonds. All of which benefits the US dollar, if only temporarily.
As does the continued weakness of US housing and employment.
My first guess, knowing; Argentina is colasping,Greece and Italy hve gone to hell, China is slowing down, etc.gold will go up or remain around the top of the channel.