Gold Commentary and Gaps Chart Updated

If you haven't already, please first read our short posting from June 25th titled "The "Oversold" Myth, Using Silver As An Example"  It should not be a shock that since then silver (and gold) sold off further. 

An interesting thing has happened the past few days however, especially after Friday's renewed plunge in gold and silver.  Bulls are no longer talking "oversold", pessimism is extremely high, and everyone seems to be discussing where the next downside target is.  By contrast, we're looking at upside targets.

On July 01, we wrote: "Yes, gold can and will go much lower the only question is "when?".  Perhaps soon, and there might not even be a bounce first.  Be prepared for that.

And with that said, it seems fear of a further plunge remains widespread so per our usual contrarian stance we expect that any selling is likely not to push gold or silver to new lows in the near term ($1180 gold, $18.50 silver)."

Friday precious metals dropped big yet again, as we'd warned could occur with no bounce first.  We still believe that gold and silver won't go to new lows for awhile.

Note the chart of gold gaps discussed in that link above, reproduced here (click charts to enlarge):

Below is an updated version, showing that gold went on to fill that first gap as expected (red circle) and we think it will hold above the recent lows  (red horizontal line)  for now.  Our interpretation of this chart is that GLD will approach $130 or at least rise to meet the downtrend in the next week or two.

Here's an interesting story: "People Can't Protect Their Culture When They're On Welfare"

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