Currencies used to be backed by gold and over the past the decade, investors have found safety with the precious metal.
Some people think currencies are only a system of money used in exchange for goods, but could we see a return to the gold standard? Last week, Turkey purchased Iranian natural gas for gold bullion. If gold becomes more actively used for large transactions amongst various nations, this could only be supportive for higher prices.
BUY SPOT?
Since gold is on an amazing run, poised for a record twelfth year of strength, finding the right opportunity to buy may prove to be difficult. The backdrop of higher commodity prices appears to securely in play as quantitative easing programs appear to be the theme globally for 2013.
PINPOINT TOPS AND BOTTOMS
Identifying tops and bottoms with classic retracement patterns can help a trader with their entries and exits. The Gartley Pattern was introduced to the world in H.M. Gartley’s book, Profits in the Stock Market. This form of technical analysis attempts to identify a reversal patterns using Fibonacci ratios to confirm the various legs of the pattern.
KEY LEVELS
The four-hour chart of gold identifies a tentative bearish Gartley pattern near the $1,750 area. If valid, this potential Gartley pattern may project a potential pullback towards $1,740 level, which is the very important uptrend support line extending back to November 5th low. Any continued weakness may target the $1,713 level.
If price action breaks above the $1,765, the Gartley pattern is invalidated and further upside would target the $1,771 level and eventually $1,800.
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