I exited the majority of my long gold positions last week because of my nervousness about the POG weakness, and the breakdown in the HUI (Amex Gold Bugs Index).
Gold is now just hovering above $300.
It seems very likely now that it'll move below the $300 level in the immediate term to test support at the base line of the rising channel at slightly above $290.
I have a feeling that this level may also fail.
Markets always have a way of upsetting concensus opinion- thus it may be wise to watch POG's movements from the sidelines over the next few weeks.
Clearly, the overly bullish views of POG rising above $330 in the immediate future (a view that i held and espoused) have been proven wishful thinking- & wrong.
Cash is winning the game at the moment...
... however i hesitate to disregard over two centuries of empirical data that show that equities and gold have a very strong inverse correlation (-.80)
Relationships that have such history should not be ignored because of a adverse short term movement against the expected trend.
The BIG PICTURE still points to significantly higher prices in the medium term.
