FREDAlert!
Volume 3, Issue 5
August 23, 2011
We will take this opportunity to note that, once again, gold has hit our $1890/oz objective on the December 2011 contract and we recommend lightening positions still further, perhaps diversifying into ETFs such as GDX, PSAU, or our old standby favorite closed end fund ASA. Or, of course individual gold stocks are fine. Yesterday, gold did touch $1900/oz but this morning is down $-8.20 to $1883.70. GLD has not hit 189 but it is close enough to advise lightening positions again.
We note that our prior 12-month objective of 169 had been hit on August 9, and we set the new 12-month objective at 189 on GLD, or $1890/oz on the active Comex Gold contract, whichever occurred first. It took 2+ months for gold to hit $1690 after our objective of $1520 was hit, and only 14 days for the $1890 to be reached. While this is fun for those that are long gold, these sorts of parabolic price moves often end violently. For this reason we advise selling some positions on the way up.
Our new 12-month target on GLD is 210, or $2100/oz on the nearby Comex Gold contract, whichever should occur first.
