Investors are extending the New Year’s rally in the gold market by buying gold. Posted by James Randolph on January 12, 2012
Buying Gold Resumes as 200 DMA Breached
January 12, 2012 – Investors are extending the New Year’s rally in the gold market by buying gold in such quantity as to breach the crucial 200 day moving average, a barrier that has been holding back the technical analysts from calling an end to the correction and calling much higher prices for gold in the imminent future. After yesterday’s trading, that’s all changed, and the news will be singing about gold for the rest of the week. It is a wonder what the naysayers who predicted that gold had entered a bear market in December of 2011 are saying now, including those who were foolish enough to sell their positions.
After trading commenced on Tuesday of last week, the gold market experienced significant pops in intraday trading, rising $40 an ounce in twenty minutes. Significant gains of 2 percent and over were realized on more than one day and gold ended the week in extremely positive territory. A lower threshold of $1,550 an ounce had clearly been established and it had become apparent that gold will stay above the psychologically important $1,600 an ounce level. However, the 200 day moving average was still taunting the price of gold as the next target to take out in its rise higher.
Yesterday, gold rose above the 200 day moving average at $1,639.40 an ounce in intraday trading. Though gold closed the day a little lower, about $1,630 an ounce, the necessary price level has been breached the road is clear for gold to continue its upward climb in a precious metals bull market. Today, gold is floating comfortably above the $1,640 an ounce level, far above the average.
Nouriel Roubini, who famously tweeted “Where’s the $2,000 gold?” in December may get his answer soon. Of course, he would probably have some explaining to do as well, such as how he can be so highly educated yet incorrect. Keeping in mind Roubini also bought a $5.5 million Manhattan penthouse a year ago with a $2.99 million thirty year mortgage. This, as he said forebodingly of the housing market, “Forget about subprime, look at prime.”
Dennis Gartman, on the other hand, very famously sold his gold in December, which serves him right. A month and a $100 gain in gold later, Gartman has officially reversed his position, saying he “got unlucky in not turning bullish properly. It’s still a long-term bull market.”
It always was a long-term bull market in gold. And now that the correction is over and gold is breaching all the proper levels to reestablish its rise, we are looking at good gains in the coming weeks. Buying gold is either an easy decision or an easier decision, but always in this market it is a good decision. Right now, buying gold is an easy, good decision.
Senior Staff Writer – Certified Gold Exchange