Friday Quiz: Is Gold Set to Rise or Fall? (February 27, 2009)
Answer: nobody knows. But there are technical reasons to expect a pullback within a long-term uptrend. Risk management suggests caution at the moment.
What with all the buzz about gold touching $1,000/ounce again (when priced in dollars), I asked frequent contributor Harun I. for some charts and commentary on the yellow metal.
Harun was kind enough to share some charts on oil yesterday, Oil Market Update (February 26, 2009) and recently he shared the possibility that the general market might well be setting up for a Bear Market rally: Forgotten Indicators: Is the Stock Market About to Turn Up? (February 5, 2009)
Chart 3.Thank you, Harun. Gold has a knack for becoming overloved, and then it's time to be careful. As a naive rube I learned this the hard way back in 2004 when $500 was the "guaranteed target"... alas it promptly dropped to $450.
Yes, it's a wonderful store of purchasing power and yes, it's in a long-term uptrend, and yes, I own it and ABX, but that doesn't negate the notion that buying on the dips rather than at the tops is a worthy money-management goal.
As usual, this is not investment advice, just a free opinion by an amateur; please read the HUGE GIANT BIG FAT DISCLAIMER below.
Books of interest mentioned this week:
Collapse: How Societies Choose to Fail or Succeed
The Collapse of Complex Societies
Fruitless Fall: The Collapse of the Honey Bee and the Coming Agricultural Crisis
The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel
Reinventing Collapse: The Soviet Example and American Prospects
Shameless pitch for my own book: Weblogs & New Media: Marketing in Crisis
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