Gold Price

In the 1/28/13 post on the gold price I suggested that the mellow metal could suffer in the
current year. The gist was that continued global economic expansion this year without
a heavy financial crisis environment could lead to a further reduction in gold's crisis or
safehaven premium even though the cyclical and monetary indicators in support of the gold
price could well be positive. Jan. 28 Gold Post

As it turns out, there may have been something to this idea. The bullion price has dropped
about 7% over this period and the current short run read for the global economy is for modest
real output growth and with inflation mild as well. Cyprus gave gold a short term bump, but
the metal  has sold down sharply this week and for now, the safehaven premium has fallen to
about 34% (Check 1/28 post for more).

The gold price now stands down around a critical support level at 1550. It has moved into
oversold territory and is trading right where the gold bugz have been able to get some
positive reversal leverage, although each bounce in price since late summer, 2011 has been
progressively milder. So, price resistance levels have been falling as well, and the gold
price without a fast rescue could well slip into bear territory. Gold Price

Let's see if the bugz come in again on a rescue mission. If I was a gold bull I probably would
not get too upset unless the gold price drops below my longer term trend support line now at
1525. To be charitable, support below that level is down around 1350, and that has yet to
withstand a challenege.