A valiant performance by SLR today which gives rise to confidence in my A-B-C correction theory.
75c is the line in the sand as I have pointed out earlier. The overhead resistance is a zone between 1.00/1.05
I am very comfortable with the price action in gold (and SLR) at the moment. We have another round of deleveraging in play and the momentum traders and hedge funds are abandoning their leveraged positions. "Da Boyz" love it when that happens. They get gold on the cheap.
In my opinion, this is a buying opportunity for all things golden. Will we go lower? Maybe; but I'd rather own gold and the companies that find it and mine it over plastic or paper rectangles.
This correction in gold is now "long in the tooth" for gold corrections within this secular bull in terms of trading days. That means it is almost likely done. Where it goes from there we must wait and see.
The DOW:GOLD ratio holds the key. If gold gets stuck at $US1000, then the DOW is going to 1000 - that is not a world I want to see.
I had been expecting a correction in gold to $US1060 and worst case the support zone of $US970-1020. It looks like the later may come into play.
I have recently bought more bullion. If you have never handled a 1oz Kangaroo, I suggest you do - it will change your concept of money forever. They don't call it "Gold Fever" for nothing :-)
SLR Price at posting:
92.0¢ Sentiment: LT Buy Disclosure: Held
