About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, May 03, 2012

Gold Note

The gold price has broken trend support here in the short run. Today, I use the Gold Trust shares
(GLD chart). As the chart shows, the bugz were venturing in long when the 12 week RSI went
down to 50, but more recently, gold has been catching bids down in the 42 -45 range of RSI. So,
it is time for the bugz to step in to support the price. But you also need to see that the recent
bounces off a depressed RSI have been weak and unsustainable. I suspect this reflects the absence
of clear and present indications of new QE programs so that gold is trading now more like an
industrial metal (check out $GYX in the bottom panel) and less like a safeguard against further
"debasement" of currency. For years now, it has been wisest to give the bugz the nod when RSI
drops below the 50 level, but one should note there is easy downside in the short term to the
$152 per share pivot line level for GLD (and $1560 oz. for gold). Let's see if the guys step up
to buy over the next several days or let it go.

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