Gold and Precious Metals
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.
* Target calculation: 1550 – ( 1800 – 1550 ) = 1300
Tom Lydon at MarketWatch reports on large outflows from exchange-traded gold funds:
exchange-traded fund sponsors are beginning to sell their physical gold holdings. Gold ETFs experienced their largest monthly outflow on record in February. This is particularly disconcerting because gold ETF sponsors increased gold holdings during previous large sell-offs, such as in the last few months of 2011.
Read more at Use gold ETFs to tackle Fed, inflation fears – Outside the Box – MarketWatch.
