Price of Gold Down 20% In 6 Weeks

Chart Courtesy Kitco

I thought it would be fun to point out to all the Paultards out there that Gold has fallen 20% over the past 6 weeks, and to express my hope that many of you bought it at (or near) the peak price. I can't help but smile when I see that price bubble bust. The people who bought into the whole Gold craze were betting against America, and people who bet against America ultimately fail.

Also, according to Technical Analysis...Gold is right now in the place predicted by the Head and Shoulders pattern that took from December 2007 to April 2008 to complete that indicated a great potential for the price to fall by a certain amount, and it has done so. Now, the price is at the point where it is testing for support, and if that fails...we can expect Gold to continue falling toward the $720 or even the $620 an ounce mark over a period of time.

Just thought that I'd let you guys know, and to go on the record. Gold is testing the $800 level for support, and I expect that to continue for a few weeks unless we and/or Israel strike Iran in that time period. After the dust settles, I expect the dollar will come back stronger and Gold will return to it's downward trend.

More from The Globe and Mail:

LONDON — Gold fell more than 2 per cent on Wednesday, dropping back beneath
$800 (U.S.) an ounce as strength in the U.S. dollar and a drop in oil prices
continued to weigh on investor sentiment.

With the dollar soaring to an 11-month high and oil prices continuing to decline, the metal's appeal as an alternative to the U.S. currency and as a hedge against fuel-led inflation has been diminished.

Gold was trading at $795.55/796.55 an ounce as of 0957 GMT, down from $804.90/806.25 an ounce late in New York on Tuesday. Gold has fallen by around $40 an ounce in less than a week.
“There's definitely a lot of negative sentiment towards gold at the moment, due mainly to the dollar's strength,” said Standard Bank analyst Walter De Wet.
“Given the strength of the dollar's rally, gold's actually holding up quite well, as we're seeing better physical demand, but ultimately investment demand still dominates in
terms of physical holdings.”

Gold struck a nine-month low around $773 in mid-August, and although it briefly rallied, the metal has come under increasing pressure as the dollar has clawed back over 16 cents against the euro since its all-time low of $1.60 seen in July.