I think the gold market is nearing an interesting stage. China has been a large buyer for the past 2-3 years at better levels than most private punters. They also advise their own population to accumulate gold. Imagine the US Gvernment advising their citizens to buy gold! I think that sums up the different world view of both countries.
So gold got ahead of itself in 2011 and fell back as a lot of speculators got burned. That's now history. ETF redemptions have been big but lately the ETF sales are being more than met by real demand. The price is starting to show signs of a medium to long term bottom. Despite the start of tapering the bears could not sustain a move below 1200 and there were probably large technical stops sub 1160-70 and lots of talk of an imminent move to 1000-1050. Hasn't happened. Doesn't mean it won't but the odds are shifting that an important base in the 1180-1220 region has been formed over the past 6-8 months. The bulls do need a break up soon above 1280-1300 but if that happens there will be plenty of technical buying and probably a move towards 1400. I'm int the camp that thinks we are heading back to 1400-1500 relatively slowly (might take all of 2014) and then should accelerate towards 2000 in 2015. I remember saying the Skol I thought we'd see 2000 before 1000 when we had dropped back to 1550 early last year. After the price action the past few months I'm more confident that will happen than I was then because the weak bulls have been liquidated and a very strong base is being formed.
