Gold has been rather quiet as of late.
It has been trading between $1,050 to $1,160 during the past few months. It is now hitting the upper end of this range, recently trading at $1,156.
There seems to be a lot of support in the $1,050 area. The Indian Central bank bought gold at $1,070. When gold has dipped to near those levels, you have seen a lot of buyers coming into the market.
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One of the many reasons for this buying and gold’s strength is because
investors are worried about the monetary outlook for the world at the
moment.
They see massive printing of money and huge deficits by all Western nations. This is why, despite the dollar's rally against the euro, gold hasn’t really sold off.
We must remember that the Canadian dollar and Australia dollar recently have seen very strong rallies, showing us that the U.S. dollar isn’t strong and the euro is weak.
Investors realize this. There are only so many Canadian and Aussie
dollars you can buy, so they are getting into gold to protect themselves against further devaluations.
Traditionally, gold tends to be strong during the second half of the year.
If gold breaks through $1,160, it might take a short-term run at $1,200.
However, history tells us that gold should begin a large move later in the year.
Right now is the time to pick your spots. Buy gold and gold stocks you like on this weakness and get ready for the inevitable move upward.
About the Author: David Skarica
David Skarica is a member of the Moneynews Financial Brain Trust.
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