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Tuesday, July 5th, 2011 | Posted by

July Breach of Gold’s 150-Day MA Would Suggest 22% Rise by Year End

Gold: Once a Year Buying Opportunity Is Quickly Approaching

Since the beginning of its bull market run back in 2002…gold has enjoyed consistently strong technical support at its 150-day moving average…[only] testing this…support once or twice a year, at most…and in each of the last 9 years, the one time that gold has consistently tested support… [has been] during the month of July. [Furthermore,] in 7 of these last 9 years gold has rallied strongly from this July support level to post gains of +22% on average through the remainder of the year. As a result, it [is important] to capture these opportunities when they present themselves – and such appears to be quickly approaching in the coming days of July. Words: 458

So says Eric Parnell (http://www.gerringwm.com/) in an article* which Lorimer Wilson, editor of www.munKNEE.com (It’s all about Money!), has further edited ([  ]), abridged (…) and reformatted below  for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.  Parnell goes on to say:

It appears that we are seeing the same July retest setting up for gold in 2011. After rising above its 50-day moving average for most of the year, gold recently made a decisive break lower…

Focusing on the SPDR Gold Trust Shares (GLD), a further -3% pullback would have the price once again back at the 150-day moving average. Seeing such a move occur in the coming week, if not early the following week, would not be a surprise given the manner in which gold has retested this support level in the past.

Conclusion

In most years over the past decade, the pullback toward the 150-day moving average has been fleeting. This has been particularly true in recent years following the financial crisis. As a result, it is important to keep a close eye on the gold price in the coming days as we move through July. For once it touches its support at its 150-day moving average, it could be off to the races for the rest of the year… [Go here for the latest graph of exactly where gold currently is relative to its 150-day MA.]

*http://seekingalpha.com/article/277796-gold-once-a-year-buying-opportunity-is-quickly-approaching?source=email_macro_view

Related Articles:

  1. Gold’s Recent Price Action Suggests Ultimate Top of $5,000/ozt.  http://www.munknee.com/2011/06/golds-recent-price-action-suggests-ultimate-top-of-5000ozt/
  2. Why Silver Could Drop Below $30/ozt.  http://www.munknee.com/2011/06/why-silver-could-drop-below-30ozt/
  3. It’s Not Time to Buy the Gold Miners – Yet  http://www.munknee.com/2011/06/its-not-time-to-buy-the-gold-miners-yet/

Editor’s Note:

  • The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
  • Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.

Gold

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The views expressed herein are the views of the author exclusively and not necessarily the views of munKNEE.com or any other munKNEE.com authors, affiliates, advertisers, sponsors or partners. Notices

Posted by on Jul 5 2011, With 0 Reads, Filed under Gold/Silver, Investing. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
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