Gold price finally breaks its 8 week trading range – so how much downside is left?
After the news at the weekend that confirms people’s worst fears about Europe, namely that Europe is hell-bent on self-destruction, by electing someone in France who wants a 75% top-rate income with massive increases in public spending and by not electing anyone at all in Greece, everything has sold off and gold has gone along for the ride.
Back on April 24th we noted:
There is now a lot of pent-up momentum in gold after effectively going sideways since September – when this market breaks it will do so very quickly, until then this range trading looks set to continue.
And that is exactly what has happened – gold has tumbled all the way from $1630 to $1585 in the space of a couple of days.
So where can we expect gold to find some support? Back at the start of April we put out some analysis of where the gold price might head should it break below that $1620 level – you can read it here.
The first decent support levels now lie around the $1560-70 area which are the closing lows at the end of 2011.
Whilst this kind of action can be disheartening in the short term it’s worth remembering that the events in the world (and especially a now very probably Euro breakup) are playing out exactly to script and are precisely the reasons that you need to own gold in the first place.
The financial crisis that started in ’08 has entered a new phase, one where the electorate throw a spanner in the all the bureaucrats work, and one where the end result will be massive coordinated money printing.
The can kicking is reaching the end of the road.
Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-finally-breaks-its-8-week-trading-range-so-how-much-downside-is-left-6852/