Commodity Trade Mantra

Posts Tagged ‘Correction in Gold’

Gold Demand Remains Stable During Sector Weakness

Gold demand peaked in the middle of 2010 & went sideways for a few years before succumbing to the bear market. That lack of strong demand in 2011 while Gold surged, was a warning sign. The amount of Gold in GLD can be a sort of an indicator for the sector. While Gold & gold shares are correcting now, the real time data coming from GLD suggests Gold demand is & should remain firm.

Gold Prices Nearing a Secular Support

The long term chart of gold shows that we are very close to secular support, which goes back several decades. Old resistance becomes support, so the 1980 and 2008 peaks will be acting a strong support. Moreover, support coincides with the psychological level of 1,000 USD. In sum, we believe the downside is limited. We have reached huge support areas in 3 leading assets.

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