Revisiting The Gold Bug

Posted by Kris | Wednesday, November 26, 2014 | , | 0 comments »

Gold DownTrending
With Dow Jones and the US markets breaking new highs, commodities especially gold is clearly losing its sparkle. With the US ending its QE3, it further puts pressure into gold as a safe haven.

From the above chart since 2012, gold has been a downtrend and it is still continues on a downtrend with no sign of reversal!!

Using Dow theory, it is on a downtrend trajectory as it is making lower lows and lower highs. If you think you are catching a bargain at GOLD prices, think think and think again. Do not fight against the trend. As the prices will get cheaper and cheaper if the downtrend continues. Don't catch the falling knife! Learn a little of technical analysis, it helps alot!

This applies to Silver, the so-called cousin to Gold. Previously, when Gold rallied to 1,800 , silver prices did not rally as much so likely even though it was promoted heavily by our local banks.

Brent Oil

Oil prices is also on a downward cliff as commodities continues to be weaken. Even our CPO is also on a downtrend and hitting year lows. 

Unfortunately our RON95 & RON97 prices did not fall in tandem, but we will need to wait until 1 Dec as our government will implement a floating price mechanism for our petrol prices. But i seriously doubt the prices of our daily goods will fall in tandem to our 'cheaper' petrol prices!!  Once our local hawker store increase food prices, I 100% doubt that they will drop the prices accordingly when petrol prices drop.

P.S Note that even though I blogged about Gold and Silver investments in my old posts, I never invested in gold or silver investments as I dislike the lack of liquidity for these investments.