I was monitoring quitely to see how GOLD is doing lately since everyone was talking about the gold rush. The media, internet, newspaper everywhere had been purporting that GOLD is going higher and higher. Looking closely at the daily chart, GOLD SEEMS to be in a distributed mode. It appears to have a triple top
pattern. Remember me mentioning not to look at patterns? I still hold up to that statement that understanding the force of supply and demand is critically vital as compared to recognizing patterns.
Why do i say that GOLD is in a distributed mode now? Because i saw supply constantly coming out to challenge the overwhelming demand. I am thinking that most of the public is afraid to buy GOLD now because the prices are too high and they are afraid that it will crash. This whole stock, forex, commodities market is a like a pyramid scheme. The lower you buy, you are safe because if prices moved up, you are emotionally statisfied. The higher you purchased, the fear of the pyramid collapsing increased exponentially, so its always wise to accumulate than chasing prices.
For the next few following sessions with GOLD. I shall continue to watch for more evidence of heavy selling and presence of weak demand to precisely determine the future trend of GOLD. For now, demand looks weak and bleak, but who knows? Anything can happen in the market!
Ronald K
