This week the gold price has been bouncing around quite a bit. Gold got as high as $1750 on monday only to drop back to nearly $1700 yesterday only to rally back again today to trade around $1730.
When you take a step back and look at how gold has performed this year all the action in the past 3 months since September 23rd is all about one thing, consolidation.
All this is very healthy in a secular bull market and hardly surprising when you look at the action over summer.
On July 1st gold took off to the up-side and went from $1500 to $1920 – all in the space of a couple of months. That’s a 28% gain in very short order and at one point the gold price had actually put on 36% for year.
But like all powerful bull markets in the past that wants to show signs that it has much further left to run gold has pulled back and has really been in consolidation mode for the past 3 months. The range is quite big with $1800 marking the top and $1587 marking the closing bottom.
But in reality the action is really centered around the $1700 level.
There are now 3 weeks before this quite incredible year closes out and if there is one thing that we’ve come to live with this year is that a lot can happen in the space of day let alone 3 weeks.
However barring some major happenings out of Europe (still very possible) gold looks set to continue this consolidation phase for the rest of the year. Which will mean something like a 20% gain for 2011 and another year of double digit gains.
The key level to close out the year will be the $1705 level – a close for the year above this level should signal that the recent highs of August should be taken out early in the new year.
When you take a step back and look at how gold has performed this year all the action in the past 3 months since September 23rd is all about one thing, consolidation.
All this is very healthy in a secular bull market and hardly surprising when you look at the action over summer.
On July 1st gold took off to the up-side and went from $1500 to $1920 – all in the space of a couple of months. That’s a 28% gain in very short order and at one point the gold price had actually put on 36% for year.
But like all powerful bull markets in the past that wants to show signs that it has much further left to run gold has pulled back and has really been in consolidation mode for the past 3 months. The range is quite big with $1800 marking the top and $1587 marking the closing bottom.
But in reality the action is really centered around the $1700 level.
There are now 3 weeks before this quite incredible year closes out and if there is one thing that we’ve come to live with this year is that a lot can happen in the space of day let alone 3 weeks.
However barring some major happenings out of Europe (still very possible) gold looks set to continue this consolidation phase for the rest of the year. Which will mean something like a 20% gain for 2011 and another year of double digit gains.
The key level to close out the year will be the $1705 level – a close for the year above this level should signal that the recent highs of August should be taken out early in the new year.
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