As we approach the end of the year, the outlook for the global economy is murky, but the outlook for gold remains strong. That being said, I think gold will at least retest its all-time highs in the next couple of months. I am adding selectively to gold stocks, but I will probably lighten up as we approach $1900 and $2000.
Long before there was any clear direction in gold, I said that $1600 and $1730 were the lines in the sand. As you can see from the following chart, these are where the battle lines have been drawn. After gold bounced off $1600, I said the outlook for gold was bullish in the short to intermediate term. Gold bulls came out on top at $1730 as well, and this is constructive.
Gold has been basing for some time, and I have no doubt this rally can be explosive. This feels like one of those times when gold stocks rally a good 20% and outperform the rest of the market. I will see how gold reacts to the $1730 level, and if I see buying pressure there, I will have to lean even more bullish. These are the kind of intermediate term cycles at least some of you should try to catch; otherwise just buy and hold and don’t even track the gold price. There is a time to be a bull and there is a time to be a bear. It appears to me it is time to be bullish on gold.Follow