According to George Leong, contributor to Profit Confidential, gold prices have been all over the chart and have been moving in a sideways consolidation channel since late September, caught between 1,800 at the top end and 1,550 at the bottom end. Leong recommends buying gold on price weakness, with a break below 1,600 representing a great opportunity.
In his recent Profit Confidential article, Investment Opportunity Alert: Buy Gold on Weakness, Leong notes that, after a recent move towards 1,800 in late February, the metal topped, and it is again struggling to hold ground at around 1,650, with key support at 1,600 to 1,625.
Failure to rally to the 50-day MA could see a subsequent move down towards 1,600, which I would view as a decent buying opportunity to buy or add to a position, says Leong. Moreover, a further decline to 1,550 would represent an excellent buying opportunity for the metal.
According to Leong, the reality is that the price of gold is currently driven by two key variablesglobal risk and world demand. I feel both factors are supportive of higher prices, says Leong.
Leong believes that there will be tough years ahead for the European Union and eurozone, along with the debt mess in the U.S.
The second major variable that could drive gold higher is the higher demand from China and India, says Leong. China is expected to jump ahead of India as the top consumer of the yellow metal in 2012. Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy
gold-related investments when gold traded under 300 an ounce. In 2006, it begged its readers to get out of the housing market...before it plunged. Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
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Profit Confidential is Lombardi Publishing Corporations free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardis current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.