Posted on by ColinTwiggs

Gold falls hard — not my best call

Spot gold broke support at $1700/ounce, falling hard to $1650. The calculated target is $1600* or $1500 depending on whether you take the base of the double top as $1750 or $1700.

Spot Gold

* Target calculation: 1750 – ( 1900 – 1750 ) = 1600

When you look at the trend channel on the weekly chart, however, it is likely that the sharp correction will overshoot the trend channel on the lower side. Possibly as low as $1300*.

Spot Gold Weekly

* Target calculation: 1500 – ( 1900 – 1700 ) = 1300

I have to eat my words from September 11: “With Europe awash with stories of the imminent default of Greece, and German banks told to prepare for a 50% haircut on Greek bonds, this would be a good time to buy gold.” Sure I qualified by warning that below $1800 all bets were off, but should have placed more emphasis on the overbought situation on the weekly chart and less on the approaching European tsunami.

8 Replies to “Gold falls hard — not my best call”

  1. Mr. Twiggs don’t beat yourself up. I’ve been a loyal follower of yours for awhile and recently became a subscriber of your chart service. Those choices were the best decision I’ve made in a long time. Your calls are usually right on the money. Some of us have to have room to use the information as they see it. Keep up the good work. August Mezzetta

    1. Thank you for your support. We should always bear in mind:
      “When pride comes, then comes disgrace, but with humility comes wisdom.” ~ Proverbs 11:2.
      Regards, Colin

  2. I agree – you offer so much intelligent debate on your chart anaylsis – good work – and in all seriousness – the world is a crap shoot and GOLD is but one of the many investment mediums awash with ‘hot’ money …

    There is so much existing profit in ‘commodity positions’ – these volatile corrections prove there is no real ‘safe haven’ – protecting wealth is a game these days and everybody is losing …

    Keep up the great work …

    EYE-BALL – http://bleyzie.wordpress.com

  3. I sold most of my precious metals fund on the way up (chart shows it well), around $1750, partly on some of your comments about the too rapid acceleration at that time. So I missed the top, don’t I always? I’ll miss the bottom, too, but bought incrementally today. I don’t blame anybody for making mistakes, only for investing too much in them.

  4. CT, I’m thinking the April high of $1580 as support which coincides with:

    1. Line of trend support drawn from January low of $1308 .
    2. 30 week SMA which has been defining support since January 2009.
    3. Weekly RSI (7) in its historical turn zone (45).

    Every time parameters 1 to 3 have lined up above she has bottomed. I’ll put a graph up on mine later.

    XAU bounced off the 20week SMA and 23.8 Fibbonnaci number last night (1640 and 1630 respectively) trend will break thru IMO.

    Great site BTW.

  5. thanks for your high quality efforts, these markets change almost daily & the search for yield is constant
    [ie no real safe haven], so maybe big money wants to shake out the weak hands or the Fed is employing
    some ‘tools’. To me looks like a good time to buy, because that tidal wave is still building, it seems to me.
    bill

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