This 5% sell off in gold looks good $GLD
We have a very strong 5% sell off in gold prices on the news that the Federal Reserve will refrain from offering more monetary stimulus to bolster the U.S economy.
To me this plunge looks like washing out the weak hands. Last May’s sell off from the high looks even worse sentiment wise.
If you look at the longer term price trend, the trend is still intact, although they come pretty close to violating it in January.
One thing about gold prices is that it doesn’t correct gradually. It tends to go through these maniac corrections.
If you believe in gold as an asset class that diversifies, hedges against calamity and a generally inflationary scenario this would be a good opportunity to add.
Related posts:
- Gold,Energy and Commodities sell off
- Still in a bear:Dow Jones Index to Gold Ratio Historical Chart
- Sell down in commodities!
- What’s Wrong With Gold Stocks?
- Long Term Market Analysis: Equities Toppish, Gold and Silver Bull! $GDX $SPY $SLV
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Gold is not productive. It doesn’t generate cash flow, and only appreciates by hoping that someone else is willing to buy it at a higher price then you.
Read Warren Buffett’s comments about gold as an investment.