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By Mike Paulenoff, www.MPTrader.com
While the banks stocks implode, let's have a look at the pattern developing in spot gold, which is 10 times the price of SPDR Gold Shares ETF (NYSE: GLD). Spot gold prices pivoted to the upside off of the $800 level, which also coincided with a successful test of the Nov.-Jan. support line ($811) and the rising 50 DMA ($812). The two session rally (+5%) likely initiated a new upleg that should climb at least into the $850 area, and in the event that gold catches a REAL BID as protection against all sorts of implosions in the paper asset and banking worlds, we should not be surprised to see it rocket quickly to $925, and then to $1,000+. Then again, since when did gold ever act intuitively? Actually, between 1976 and 1981, when it acted like a hedge during a period of unabated inflation (The Jimmy Carter years). In any case, from a near term perspective, higher prices should be forthcoming. MJP 12:50 PM ET ($836.20)
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
