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The One Line to Watch For Where Gold is Heading
Since 2011, the Fed and other global Central Banks have injected over $2 trillion into the financial system. They’ve also announced plans to continue pumping money ad infinitum.
And yet for the period from 2011 until two weeks ago Gold, the inflation hedge of choice for investors, hasn’t done much of anything.
Why is this?
Part of it has to do with simple sentiment. Gold was overextended in 2011, stretched far away from its primary trendline:
On top of this, investors had gone too carried away on expectations of more Fed liquidity. QE 2, which was announced November 2010, was a mere $600 billion (not much compared to the Fed’s current programs which will extend forever). But yet Gold rose like a rocket ship starting in August when the Fed first hinted at QE 2.
Which brings us to today. This excessive enthusiasm needed to cool and Gold has done just that for the last two years. Then the Gold Crash happened and were right back at the long-term trendline.
The is the key area to watch. If Gold continues to correct, then we could go to $1200. But Gold should hold up here as ong as the long-term trendline remains intact.
We’ll have to see. But reports of incredible demand for the precious metal are ubiquitous.
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Best Regards,
Graham Summers
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Well said, also how the fuck can you make a trendline in this mon buey printing environment. Stoicastics might work in a stable monetary system world wide but what a fuckin dumbass pathetic analysis
Let's face it: the governments and their proxies can reduce the "price of gold in US dollars" to ZERO if they want simply by selling enough naked shorts in the paper gold futures market. (REAL gold would disappear, though...!)
Drawing lines on graphs is not much use when these gamesters are in charge...
Thanks Graham. You have been consistently wrong about everything so this gives me great confidence to cintinue to buy more Gold. It's a bit like the "Goldman Sachs inverse indicator".