"Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions." - Sun Tzu
Friday, February 15, 2013
The Short Gold Trade - Some More Technicals
My short position in Gold is a short-term trade - nothing more. The chart below shows that the metal is in an intermediate-term range between $1,550 and 1,800. Shorter term, Gold is trending down. With my current position, I'm simply trading a swing within this downtrend. A lot has to happen for Gold to break below the 1,550 support and I don't see this happening.
Gold showing a short-term downtrend in a longer term range
Gold has the tendency to go through long consolidation periods after vertical price moves. The following monthly chart shows that Gold's action during the last two years is nothing unusual and calling the end of the long-term trend is not justified in my opinion.