Long Term Targets on Gold
"Take a chance! All life is a chance. The man who goes the furthest is generally the one who is willing to do and dare. The "sure thing" boat never gets far from shore." - Dale Carnegie 1888-1955, American Author, Trainer
The 450 zone provided an incredible amount of resistance and now that it has been overcome the very long term picture looks rather interesting for gold. Usually a break out such as this results in a test of the resistance zone however due to the current geopolitical situation this might not occur. However if the current geopolitical situation had to change even temporarily Gold would most likely pull back very fast to test the 450 ranges; gold would then become a screaming buy. Please don't sit there holding your breadth for the above situation to unfold; should Gold drop to this level just look at it as a huge free bonus and load up.
Please do not let these targets activate the greed demon within; simply running out there and dumping all your money into Gold is not a wise thing. In fact no matter how good the investment looks one should never put all their eggs in one basket. History so eloquently illustrates that those who fail to observe this simple rule usually end up with empty pockets. One last thing, remember these are very long term targets; hence do not expect them to be hit over night.
Next zone Major of resistance is 720 (there are other zones in between but we are looking at the very long term picture right now); a break past this should take gold all the way to the 830-870 ranges.
2nd target will be a test of the old highs followed by a pretty rapid pull back then some sideways action; Gold will then be ready to test the 1200 zone.
Extreme target for now is 1800 dollars.
While Gold is not at the ideal entry point, such points do not occur often; one such time was during the 2002- early 2003 period. In light of this it would make sense to start nibbling at Gold now for those who have no positions with the intention of adding to these positions if Gold should correct further. Another major reason we are actually advocating the purchase of bullion after being neutral on it for so long (we were pounding the table on Gold from 2002-2003) is that has entered the minimum oversold ranges of several our indicators. Last year Palladium looked more interesting then gold and that's where we advised our subscribers to invest their money; it turned out to be the best performing precious metal in that time frame. We simply let our indicators examine the entire commodity sector and look for the best risk to reward investment. One must remember that is a commodities bull and not just a precious metal bull. From Late 2003- to 2005 oil (black gold) was the best place to invest.
Remember that as each target is hit there are going to be some rather hard and rapid corrections; the ride up is not going to be one sweet journey. It if was everyone would simply sell everything they have and just buy Precious Metals. Nothing good ever comes easy and if it does it's usually not worth it. Our next article will take a look at Silver, the poor man's gold.
"It is easy to be brave when far away from danger." - Aesop 620-560 BC, Greek Fabulist