Nevertheless, anyone paying attention knows that the price has essentially stagnated for the past 17 or so months following the high of $1,921 hit in the fall of 2011. In more recent times, as people seem to be getting comfortable with the notion that the economy is healing and better times lie ahead (as evidenced by slightly increasing bond yields and happy days in the stock market), gold is still moving sideways. So, if I were looking for a sign that gold is at a tenuous point, it is that I would have expected the yellow dog to participate in the party. And that it hasn’t is a slight rebuke of my thesis.
But that’s what makes markets. Gold remains the contrarian play (until otherwise noted).
In any event, I looked at the chart today and think the price has bottomed for this period of the cycle. Might I be wrong? Sure. But, I don’t think that it would be a very big deal if I am. Chart below for reference (using GLD as proxy) and it bounced on an important trend line that dates back for years. The one caveat is that a trend line can better be thought of as a region of support, meaning the price might flirt a little bit below in days ahead. That would be alright.
