I have posted this chart over the WE, ought to help explains the situation.
If you are optimistic you'll be looking from the low and say the trend is bullish. If you are objective then you will observe where price has fallen and say it is promising but not a confirm bull trend. I am qualifying this discussion from a longer perspective. Yo can however flip a 1M chart and say if is super bullish breakout, matter of perspective I guess.
Just remember I am opining from a much longer term than 1 year price action. I also do not know how long that piece of string is but as the market gives me the additional bits, I can second guess how much left it can give which is practically impossible unless using some faith OR I can manage as best I can the situation I have been given right now. Risk mitigation.
You don't have to be proactive if you don't want to but at least be aware of the consequences. Ask the SLR MML TRY RRL PRU and a heap of other angels at the time what they thought of gold price when it retrace off the $1900. As the deeper the retracement and each bounce produced a lower peak whether daily/weekly chart, what were the sentiment back then? Long term it should be ok or will break $1900 and keep rallying?
I am not saying it won't be $5,000 in the future but if its price reverts to the longer term mean (bearish) what will happen to the gold producers you are exposed to. Stock price valuation has exponential elasticity both up and down which is why with a 30% rally in physical gold, some gold stocks have gone up 3-5 baggers. If gold price retreats back to $1050, will that reflect a small loss in the SP? I wish that were the case and I would just leave my exposure, and come back in a years time to review.
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