Gold plunged today as the steep but orderly decline from a "Matterhorn" top
gave way to a stampede for the exits as blind panic set in - normally a symptom
of a bottom. The "Matterhorn" top is so called because it involves a market
that ascends in a steep uptrend, then without any kind of pause to mark out
a normal top distribution area, it goes into a steep decline that more or less
mirrors the ascent that preceded it. The Matterhorn top is, of course, most
familiar to Swiss investors.
Despite the plethora of pundits reading "the last rites" for the dollar, it
did as we expected and broke higher from its base area. This development really
put the boot into the Precious Metals - so much for those who loftily proclaimed
that gold had "broken free from its inverse relationship with the dollar" -
how can it break free of the currency it is priced in? - the notion is absurd.
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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