Gold hit $1300 today, which was my target at the start of the year. What’s next?
The high in gold was $1305 but afterwards a combination of profit-taking and pre-ECB jitters sent it back as low as $1285. On the face of it, that argues for throwing in the towel now. Prices are up nearly 10% this month in the best month in three years (the previous best month was Jan 2012, and that it was a January isn’t a coincidence).
What argues for waiting is that after the $20 blip in gold prices today, buyers emerged and prices bottomed almost immediately. Since then, they’ve climbed up to $1293. In addition, February is another strong seasonal month, the ECB will print to some extent and the Lunar New Year is still coming.
Gold intraday Jan 21 2015
I still like gold because the momentum is higher, the ‘story’ is improving with more central banks looking to print and aside from the 100-week moving average at $1309, there isn’t much resistance on the chart.
That said, gold has had a quick run and a risk event is coming. I had a very large position in gold in my retirement account and closed half of it. If there’s a shakeout back to $1240, I’ll put the full position back on. If not, I’ll ride it up to $1340 and take half off again.
