SDNIFTY: GOLD MAKES A NEW HIGH

GOLD MAKES NEW HIGHS

As said the last few posts about gold the rally in gold continues and it now has broken off to new highs and at the same time has broken out of the cup n handle pattern which is a bullish pattern.

The next supports for gold are at 1245$ then at 1215 and Athena t 1200$, for long term investor though concerns about the rally should appear only if gold dips below 1160$.

Talking about targets there are two of them.

1^st is the 1300$ mark which is the target for a inverse head and shoulder.( not shown In the chart)

2^nd is the 1400$ mark which is the target for the cup and handle patter (shown in the chart). But both these targets will not be achieved in a fast and easy way as gold does not rapidly in one direction like equities, expect a lot of sideways movement with a positive bias, plus there is this negative divergence as well which should be watched with interest.

The rally so far in gold tells us many things.

One that there is excess of paper money floating in the world right now with the governments running printing machines overtime for bailouts ad to repair there budgets.

Second -investors are wary of debt problems in Europe and are also wary of the austerity measures proposed by Germany and other countries which may well put a dampener on the feeble economic recovery we have had in the US.

The direction gold picks up from here on will be a signs of thing to come in medium and long term as far as global economy is concerned.

Please find previous articles about gold here..