Gold is oversold, that’s the theme of this post. Through yesterday, gold has been down and down, almost everyday since hitting high in Mid July’08.
Attached chart has a simple technical analysis and both RSI and MACD are in the oversold area. Each time we saw this low, Gold rallied approximately $70-$75 in following weeks. $800 is another strong fib support area. But before you jump into a straight trade, pls do your due diligence. Gold can be very volatile and is open to currency fluctuations as well as uncertain market climate.
Gold has been on a downward move ever since Fed decided to leave rates unchanged and so did the ECB. Dollar strengthened vs Euro resulting in a sell-off in metal and commodities. But I think the recent sell-off is overdone. It temporarily broke 800 support yesterday, probably to wash-in-rinse the weak traders. Only coming days will be able to demonstrate if this was true.
There are couple of ways you may choose from, to participate for a bullish case. GLD,(a gold ETF), GDX (gold stock ETF), XAU (Gold/Silver index), HUI (Gold Index) or via gold futures. If you are an OPN subscriber, pls visit the thread for speculative bonus alerts on how do I want to play this move.
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