Gold bullion makes it eight in a row – what next?

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I have just arrived in Geneva after an exhausting but hugely successful few days in Ljubljana, quaint capital of Slovenia. It is rather difficult to write proper posts while on the road, but I will do my best to feed interesting snippets through – that is when not investigating how the gnomes see the future of Swiss banking.

Gold hit a new peak after a drop in the US dollar to a 15-month trough, resulting in the precious metal recording an eight-day winning streak. According to Bespoke, the current run represents the seventh time since 1980 that gold has had a streak of eight or more consecutive days with a gain. The report said: “As shown below, the only time one of these streaks went for more than eight days was back in 1982 when the ninth day was also positive (on the tenth day it fell 5.7%, or $63 in today’s prices). Looking out over the next week, there has been little consistency in the results as periods of negative and positive returns have been evenly split.”

eight-day-winning

Source: Bespoke, November 11, 2009.

Meanwhile, if you are looking for an explanation for gold’s strength that goes beyond the weak dollar argument routinely offered, take a few minutes to read Mish’s recent post entitled “Budget deficits soar out of control in Eurozone, Germany, US, UK, Japan; yen’s last hurrah“. Then consider as an investment option “something that has no budget deficit” (in Mish’s words).

Fellow-bull Adam Hewison of INO.com expects a possible consolidation or correction before gold advances further. He explains his thinking in a short technical analysis presentation you can access here. As said a few days ago, I remain bullish on gold in the medium term but, given its notorious volatility, will only do additional purchases on pullbacks.

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2 comments to Gold bullion makes it eight in a row – what next?

  • Prieur – while the mea culpa is appreciated we your readers should give some and more credit where’s it due. I for one find your snippets quite valuable but especially your readings.

    The McCulley piece alone was worth the price of admission.

    How you manage to travel, then meet and still find time to scan the reach and range of semi-obscure pieces and even just skim them is beyond me.
    After all you have a real business to run.
    Gracias.

  • admin

    Very good article.

    In my opinion, it is all a matter of market timing. It does not matter if it is gold, oil, or Microsoft, if you have access to good market timing signals, they will help you get in and out at a profit.

    No guarantees in this business, but if they are right most of the time, you can still make $s.

    There are may web sites providing them out there (search Google). Just find one that works and use it! Check out http://invetrics.com as an example.

    Its Dow Jones timing signals are up a respectable 51% for the year (as of 8/18/09.)

    Following a market timing system works!

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