Gold on the brink
Posted by Danny on February 4, 2013
The S&P 500 and the Dow Jones Industrials index have come very close to their all time highs last week.
Even though there is a pullback today, I think we will see another attempt to set new high marks this week or next.
Meanwhile let’s have a look at the Nasdaq index (click for larger image):
The Nasdaq has a little bit more room to rise. Could reach 3225 in the coming weeks.
But the Earl2 index is showing the first signs of topping out, which means a more significant correction is likely to start within the next few months.
As chart of the week we take a look at gold prices again (click for larger image):
The precious metals markets are going to get interesting soon. Gold appears set to break out of a narrowing triangle.
Which way will it go? Markets have a habit of putting investors on the wrong foot, before making a move.
I think we will see a weak attempt to get above $1700, and then a sudden move to the downside.
Unless gold breaks above $1800, there is no reason for enthusiasm.
I will be selling my gold related positions this week, and will buy them back after we get a good correction or on a break above $1800. In the worst case I will have given up some 5% profits.
PS: if you missed out on our forecasts for 2013. They were published last week and you can find them on the Four Pillars Finance blog: here.