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Aha. As I sneak around the side alleys of Asia and India and Middle East I hear endless and at times heated debates about the future of gold. I have been hearing this for some time now. Up, up, up they shout. But there again if gold was not the topic there would be surely numerous others. Has been that way for millennia. Funny how gold is one topic many feel close to. Not the price of diamonds or platinum or black gold. The yellow stuff. As that is what many hoard for fear of runs on banks or war or whatever.
So what has been happening to gold and where to from now?
We look at the daily and weekly and monthly chart for gold futures and XGD – the ASX index for gold.
Gold Futures
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XGD:
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First gold futures. Gold has been on the slide since mid-2016. Well in fact for the last five years. Just as the back street pundits were squirrelling bars away in their bunkers.
If you believe in the monthly chart, then we could see a continued solid decline for the next two years – to a level 50% below its peak in 2011. And all that gold under the mattress.
The weekly in both cases suggests a rally. That is usual in markets – after a long steady fall we see recoveries – dead cat bounces as they say. As markets rally then the disillusioned sell out and heave a sigh of relief.
If you are a trader this a wonderful outlook for you.
If you ‘buy and hold’ then hang in there and be patient and you might just get a nice bargain. For me this is my likely scenario.
May 2017 be a cracker year for you – and as well firstly good health and happiness.
Enjoy the ride
Tom Scollon
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