Just how you feel
You got to roll with the punches
To get to what's real
--Van Halen
With a +$30 pop this am, the motion in gold is of some technical significance. Intraday, gold has broken through the multi-month near term downtrend line.
It is now filling the gap created by last month's breakdown. The 50 day moving average looms directly above.
Classic technical analysis suggests gold runs into some resistance here. Will be interesting to see how the price action unfolds from here.
position in gold
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
1 comment:
Gold is an unusual asset. It's an asset that people hold as disaster insurance. A lot of people hold gold as an inflation hedge. But movements of gold prices don't predict inflation very well, actually. But anyway, the perception is that by holding gold you have a hard asset that will protect you in case of some kind of major problem.
I suppose that one reason gold prices are lower is that people are less concerned about extreme outcomes, particularly negative outcomes and therefore they feel less need for whatever protection gold affords...
Gold price going down is not necessarily a bad thing from that perspective. It suggests people have somewhat more confidence, and are less concerned about really bad outcomes.
~Ben Bernanke
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