Gold Price -- Bugz To Be Tested Again

A graceful bear market is developing with gold. The bugz, however, have made repeated stands
down around the pivotal $1560 oz. area and are about to have that bullish resolve tested again.
Gold Price Chart

The downtrend in the gold price since late summer 2011 reflects the deceleration of global
economic growth momentum and the absence of further QE by the Fed with exception of the
$100 bil. currency swap line the Fed put in place over the early months of 2012 and which has
been largely unwound. The late 2011 - early 2012 surge in the gold price may have also
reflected the ECB LTRO liquidity injection program od 12/11.

So the gold price is moving down toward an oversold on RSI, a move that has brough the bugz
out each time since gold started its cyclical advance in late 2008. the positive trendline of that
advance has been broken. The 200 day m/a has rolled over and the gold price has not even
tested it for a couple of months. So, it has come down to the pivot at $1560. Note, too, that
the rallies off that line have been weakening and that prior support in the $1640 - 60 area
has turned into resistance.

With the Fed now on the sideline with QE, the bugz have a stern test just ahead.