Gold breaks $1500/ounce

Gold fell rapidly on Friday, breaking below support at $1550 and closing below $1500 to signal a primary down-trend. I have revised the target for the down-swing to $1300*, which is roughly a 30% pull-back from its 2011 peak at $1900. The strong warning from 13-week Twiggs Momentum has been confirmed. Recovery above $1550 is most unlikely, but would warn of a bear trap.

Spot Gold

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

3 Replies to “Gold breaks $1500/ounce”

  1. Australian banks are so much more reliable than those in the USA, I think we should just leave them alone.
    They do know their business.

    1. The same was often said of US banks prior to 2007. In fact US banks use higher risk weightings (50%) for residential mortgages than Australian banks (15% to 20%). I believe we need to harden our banks to withstand future shocks — not past ones.

    2. “They do know their business.”
      Leveraging 40 to 50 times on residential mortgages — especially when housing affordability is among worst in the world — is not prudent management and is effectively betting with the taxpayers’ dollar (relying on a bailout if it goes wrong).

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