Really exciting (yawn) move in gold. I mentioned a couple of weeks ago that gold was breaking up and was going to re-test the previous high.
I just guess there are plenty of articles “explaining” why gold is going up. I have no patience or interest in reading them as the only reason gold is going up is because it’s price is increasing (that’s an attempt at a joke).
There is no particular reason for gold traders not to have moved gold above 1,000 on this move.There are plenty of reasons for a double top. I would expect “profit taking” selling at this point. If the selling moves the price below 700, the next stop will be 600 to complete a head and shoulders pattern that will tell gold traders that the bubble is over taking the price back to around 400 within 4 years.
The explainers should explain why gold went up during a deflationary period (Oh, I know, because the expectation of inflation in the future due to current deficits, right? was I close?). If that’s the explanation, it contradicts the explanation for gold going up before.
This move shows once again that gold is not related in any way to inflation, that it is just a shiny metal which is fun to trade, and that has no inherent value as money, or as anything else (unless you are an electronics manufacturer, that’s it).
Franklin @ February 22, 2009