Saturday, July 12, 2008

How to invest in gold. Technical analysis.

Major broad US indexes are more than 20% down from October's highs. This is official definition of the Bear market. Last week pressure came mostly from financials and mortgage lenders. News about mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) and later after Friday's market close failure of IndyMac (IMB).

On the other hand all these bad news keep gold price rising as a hedging tool for financial crisis. See below inverse correlation between two ETF underlying gold (GLD) and financial sector (XLF).

This week gold grew even more than crude oil that peaked at all time high. What is the target price for gold from short term perspective? I found this interesting video with technical analysis for gold price. Are we heading to $1020?


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