Simit Patel

With gold falling below $900, many perma bears and gold bugs are asking: what's going on here?

Let's start with the chart below, which shows the past four years of gold's price history. The first level at which I'd look to re-evaluate conditions is $770, which is clearly a pivot point and is also where the 38.2% Fibonacci line is at for the gold rally from $400 to over $1,000.


Personally I view gold as a bit like saving and investing, and simply accumulate gold when I can, and plan on continuing to do so for the perceived length of the long-term bull trend. However, I may try to add more or take profits around key price levels.

Fundamentally, the long-term case for gold is only getting stronger. Political instability is the key barometer; the more political instability there is in the world, the stronger the case for gold. Our current world, with increasingly vulnerable fiat currencies and controversial fiscal policies, suggests the bull market in gold is just beginning.

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Unregistered

Hey Simit,
Do you think that below $900.00 is bottom of gold or its still not bottom yet?? Looking to buy some seriuos gold but can not decide whether i should wait to price to go down around $700 mark or no??

Thanks for you help..

Unregistered

Hey Simit,
Really good post. I was looking at silver prices and looks like silver give you more return than gold. What's your input about buying silver??

Simit Patel

@unregistered1, I generally don't try to time the gold market, although I do think a move to 770 is quite possible, especially if we break below support in the 840 - 860 range.

@unregistered2, yes I like silver quite a bit, and think it will easily soar past last year's highs of over $18 an oz. So I put silver in the same category as gold, in that I accumulate it on an ongoing basis as part of my savings.

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