I received an email from a reader asking me if I was buying gold yet, given my commentary a few weeks ago (http://www.valuetrend.ca/?p=1123) . In that posting, I noted support at $1680, then $1600 for the metal. My answer to the readers question is: not yet. I’d like to see a confirmation by momentum indicators – such as Stochastics as shown on this weeks chart – that $1600 can and will hold. We’re not seeing that yet – see chart above. Stochastics is meandering, suggesting a turnaround isn’t quite here for gold. While we did see an intra-day test of $1613 (pretty close to $1600 support) on Wednesday of last week, I’d also like to see follow-through on the rebound we saw Thursday before getting too excited. Otherwise we could see a listless price direction, or further negative price movement over the coming sessions. Its up today, and thats a good start. Lets see if it can hold that strength.
All in, I am watching gold with interest, and may eventually enter a trade. But I’ll need a bit more evidence of stability before I pull the trigger.