Thread: Pause, not Reversal, in Gold Flight-to-Safety Trade

Pause, not Reversal, in Gold Flight-to-Safety Trade

Commodities / Gold and Silver 2010
Jul 14, 2010 - 11:46 AM

By: Mike_Paulenoff

What is fascinating about the enclosed daily charts of spot gold and nearby 10-year T-note futures is that both major trends remain very much intact and dominant despite the recent weakness. In fact, the weakness has NOT violated any meaningful prior pivot low -- in gold at the May 21 low of 1165.74 and in the T-notes at the June 21 low of 119-24.

Purely from a technical perspective, the 6.5% decline in gold and the 1.5% decline in T-notes appear to be "normal, minor" corrections within the larger uptrends. To listen to bond and stock market pundits claim that a mass exodus out of bonds and, to a lesser extent, out of gold will now drive equity prices much higher seems to belie what these charts are telling us -- that the flight to safety trade is undergoing a pause that refreshes, rather than a total reversal...at least for now.

For that reason we are long the SPDR Gold Shares (NYSE: GLD) and iShares Barclays 20+ Year Treas Bond (NYSE: TLT) in our model portfolio.



By Mike Paulenoff

http://www.marketoracle.co.uk/Article21105.html

Gold is about to take a dive. It has been topped out for months.

Gold is a hedge against the Dollar...personally I would trust gold before the dollar.. that is my opinion of course...

Kathyet

Where is the bottom after trillions of dollars of inflationary paper?