Gold had a retreat on Friday and broke through some resistance levels falling over $20 before recovering towards the end of the day. In Asian trading we are up $5 presently to $1225.80 continuing the rebound. Part of the reason why we headed lower was the dollar moved up over the 98 mark on the index. We are still over 98 on the index but down 4 cents to 98.09. As I have said repeatedly in my Current Thoughts, gold will follow an inverse relationship to the dollar over time and Friday we saw gold catch up to what the dollar was doing.
I do see the dollar continuing higher to 100 and breaking 100 in the months to come and I do think this will put some big time pressure on gold still. There is still a small bull move in gold but it is weak now and I think topping. Can still possibly have another run higher but the last run did not hit higher highs and we have to watch those highs now to see if they are hit before lower lows. Once we break $1,200 in gold we should be heading down to the lows again. A final break below $1,050 confirms in my mind the long awaited break of $1,000 is next up.
I will becoming more and more adamant about buying gold soon enough but I need to see a few more of my targets reached. I do still have the advice of dollar cost averaging into one’s allocation into precious metals and your goal would be to make your last purchase the bottom we reach but the odds are it won’t be a perfect buy at the bottom.
Anything close and you’ll be very happy years from now.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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