my analysis

Just my opinion.

Gold rallied approximately US$204 from $642 to $846. It moved into an extremely overbought position on many technical indicators, reaching close to 80 on the daily RSI. It is taking a breather.

When Gold moves into an extremely overbought position it normally takes between 6 and 10 days to react back to the 50 day moving average, generally with an initial bounce off the 20 day, and drops between 35 and 40 points on the daily RSI. Today is day 6 and we are 7 points away from a 35 point drop on the daily RSI.

I expect that towards the end of next week, we will see prices around US$770 with an RSI in the mid 40's. I expect the price will not quite reach the 50 day moving average, as Gold is in a strong market, so don't wait for that as a buying signal.

I believe that not only will this represent the best buying opportunity since the 1970's (unless you bought in 2001 and have held) and maybe the last great buying opportunity before Gold surpasses its nominal high of around $850 and doesn't look back for many a year.

Stanley Druckenmiller of 'The New Market Wizards' fame stated in the book 'Sometimes it takes courage to be a pig.' I think its time to be a pig.

Enjoy the ride