"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

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Friday, April 29, 2011

Monthly Gold Charts - April 2011

Gold put in a stunning performance for the month of April taking on $117 for a gain of over 8%.

The following chart is an inflation adjusted chart using the government's official CPI numbers ( not that they are any good but they at least serve to give us a view of where the metal should be priced if it kept up with even those fairy tale figures). I should note here that as a general principle, once a market takes out a 75% Fibonacci retracement level, it almost inevitably recaptures the entire move from whence the calculation began. In plain speech, that means gold is now firmly on target to reach at least $1750.

1 comment:

  1. So by that logic, once gold has achieved 1750 it should crash, as it did last time. You may create a inflation adjusted chart and use that as logic to justify a higher price, but you've missed the point that price spike in gold in 80's was a bubble right, thats why it crashed later. so by corollary this time too we are in a bubble ? and this should be followed by a crash ?

    i think both logic (inflation adjusted gold as well as my hypothesis) are wrong. I am as bullish, infact i see a parabolic move in next 1-2 yrs in gold. But again, ppl tend to use bad logic in justifying movements in the market.

    That gold should go up has nothing to with where it is currently in inflation adjusted terms as compared to its historical high. And if it is, then its also a bubble as was in 80's.


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