Gold Technicals and Fundamentals Overview
Where does goes stand Technically and from Fundamentals?
Yahoo has a great feature where you can plot a bunch of Technical Indicators on the stock chart.
GLD, the Proxy for Gold Bullion, looks overextended. The price of the metal is trading significantly above the 50 day and 200 day moving average. See chart here. The market also is trading at the top envelope of the Bollinger band, meaning that a sudden correction is likely at any time. However, since the fundamentals of the metal are looking tidy, any correction will be used up by buyers waiting on the sidelines to get back in.
ASA, my favorite proxy for Gold Stocks, also looks similarly overextended. See chart here.
The fundamentals look strong. World economies look strong, and buying in Asia is the most cited reason for the present relentless bull. The lower exploration budgets in the 90's when the metal collapsed also help fuel the mad rush-the mines are running at full capacity and there just isn't enuf metal to satisfy all the demand. Buying from the middle eastern states, who are wallowing in cash after their Oil bounty, is also another possible explanation for the rise in Gold prices.
No one knows the real reasons, but within the above mentioned reasons, nothing has changed-so we will go with the "trend is your friend" or "fundamentals are in tact explanation" for the Gold Bull.
Also check out my site for Trading Resources on the Internet, http://www.tradingresources.org
Sanjay John G.
Yahoo has a great feature where you can plot a bunch of Technical Indicators on the stock chart.
GLD, the Proxy for Gold Bullion, looks overextended. The price of the metal is trading significantly above the 50 day and 200 day moving average. See chart here. The market also is trading at the top envelope of the Bollinger band, meaning that a sudden correction is likely at any time. However, since the fundamentals of the metal are looking tidy, any correction will be used up by buyers waiting on the sidelines to get back in.
ASA, my favorite proxy for Gold Stocks, also looks similarly overextended. See chart here.
The fundamentals look strong. World economies look strong, and buying in Asia is the most cited reason for the present relentless bull. The lower exploration budgets in the 90's when the metal collapsed also help fuel the mad rush-the mines are running at full capacity and there just isn't enuf metal to satisfy all the demand. Buying from the middle eastern states, who are wallowing in cash after their Oil bounty, is also another possible explanation for the rise in Gold prices.
No one knows the real reasons, but within the above mentioned reasons, nothing has changed-so we will go with the "trend is your friend" or "fundamentals are in tact explanation" for the Gold Bull.
Also check out my site for Trading Resources on the Internet, http://www.tradingresources.org
Sanjay John G.
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