Here's a chart from Chart of the day.
It's clear that gold prices have corrected from the ''red'' resistance line.
Are we headed for a sideways correction like the mid 2006- September 2007 correction ?
OR
Will prices test the lower green support line if Wall Street has another 'mega' correction ?
The fact that stock market earnings estimates for 2010 & 2011 are far too optimistic, not to mention that most of the appreciation is already factored into stock prices makes me more concerned that we could see a correction in stock prices that forces gold prices back to the ''green '' line this summer.
This would mean a pull back to levels around $950. That's only $140 below current prices.
Short term pain in a long term gold market !!
Panic selling affects all markets equally, so I don't think gold will be spared if there is a broad market sell off, although I do expect gold to outperform other commodity markets.
Lastly, I would like to remind readers who are looking to buy 'silver', that it is more volatile than gold, so it will correct more than gold!
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