Yesterday (Thursday 19th Dec) gold closed on a daily basis below the $1200 level (down at $1187) after another extended period of selling of the precious metal.
I was reminded of a blog post I wrote almost a year ago in December 2012 “A contrarian Gold Sell signal from this weekends FT?” about how the FT was reporting that Central Banks where ramping up their Gold purchases and had recently purchased the most Gold in 40 years. I commented that very often Central Banks trades in the Gold markets were excellent contrarian indicators and that perhaps the Gold boom was over and it was time to start selling Gold.
Well what a year its been if you’ve been selling Gold! We ended last year at $1656 for the precious metal and yesterday (Thursday 19th Dec) we closed at $1187. That’s quite some move south as the chart below shows.
Using a mixture of Binary Options and Direct Trades I was able to take part and profit from the collapse in the gold price. I wrote about it earlier this year here: Post
Going forward I still see nothing to change my view that the “Gold Rush” is over. If prices start closing below the June 2013 lows of $1180 on Weekly and monthly basis then I expect another leg down to the next level of support.
Hopefully you can see about how melding Fundamentals, Sentiment and Technicals together on higher time-frames can help you create good trade plans.