GOLD - TOO FAR TOO FAST?

Here's an update from Przemyslaw Radomski of Sunshine Profits. He says that Gold is near a critical resistance and consolidation is likely.

Graham Summers of Gains Pains & Capital warns of the possibility of a correction in gold prices, given the herd like negative sentiment towards the USD at the moment. Notice the '''negative rising wedge''' in the chart below.

Personally, the awesome relative strength in precious metals (especially Silver) in recent months has surpassed my rather conservative estimates.

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QE2 has come and gone and there's no solution to the ongoing ''recession'' as yet. Commodity prices are just about the only thing that have responded positively to the FED's QE2!!!

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Meanwhile, Club Med in Europe is showing no signs of turning around, and this has taken the edge off the recent Euro rally. The USD Index has recently crawled back above the 80 mark.

Below is a long term USDX chart by Graham Summers.

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Remember, just because the USD is headed downward over the long term, doesn't mean that it can't stage a counter trend rally in the near term.

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Equity markets, especially emerging markets are refusing to factor in the possibility of a relapse in the global economy.

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A cautious wait and watch approach may be the best way forward for now.

Traders may consider hedging some long gold positions.

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Short term corrections aside, I remain a long term Gold Bull!