A correction in the Precious Metals sector had been a growing probability
as it had powered higher week after week. Now, last week's action demonstrates
that it is upon us.
Gold did not break appreciably higher when silver broke out towards the end
of January, and instead crept higher, held in restraint by a long-term trendline
shown in the latest Gold
Market update, before finally buckling last week, no longer able to stand
up to the dollar's increasing strength, forewarned of in the Bin
Laden article some weeks back. Gold has risen very steeply recently, and
is running a huge gap between its 50 and 200-day moving averages. Common sense
dictates that it is vulnerable to a significant reaction here, and should this
come to pass a corollary of this is that the big gold stocks, which are still
very overbought, could give back a sizeable percentage of their recent gains
fast. How much? - the following charts are intended to give you an idea.
The above represents the opinion and analysis of Mr. Maund,
based on data available to him, at the time of writing. Mr. Maunds opinions
are his own, and are not a recommendation or an offer to buy or sell securities.
No responsibility can be accepted for losses that may result as a consequence
of trading on the basis of this analysis.
Mr. Maund is an independent analyst who receives no compensation
of any kind from any groups, individuals or corporations mentioned in his reports.
As trading and investing in any financial markets may involve serious risk
of loss, Mr. Maund recommends that you consult with a qualified investment
advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction
and do your own due diligence and research when making any kind of a transaction
with financial ramifications.
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