Monday, July 8, 2013

Gold could bottom at $900

Understanding the technicals of a market is terribly important. Understanding the fundamentals of a market is terribly important. When you can find a market that you understand technically and you understand fundamentally – and both the technicals and the fundamentals are pointing in the same direction – you're probably going to succeed.

As for "the box," it's something I've always looked at; it delineates the 50 to 62% retracement of the previous rally, or the 50 to 62% retracement of the previous big decline. If you think gold started on its upward climb from $275 an ounce 12 years ago, and got to close to $1920 an ounce, 50% back merely takes you to about $1100. A 62% correction could take you all the way to $900. That's a long ways away.