Joined Jun 2010
Status: s = k log W
Regarding Gold as long time investment (hedge):
when you look at the following chart, it is a long time chart of Gold, going back to 1863, we can count the EW's on that.
Wave 1 ended 1915 around 18100
Wave 2 ended 1970 around 107.40
Wave 3 ended 1980 around 850.00
Wave 4 ended 1999 around 257.15
Wave 5 ended 2011 around 1844.00
So what to expect from the recent ongoing corrective wave down?
Per the EW rules and guidelines Gold should drop now at least into the range of the wave 4, so target would be 257-850 USD
but more likely it should drop to the range of the subwave 4 of wave 3, which is roughly located between 100 and 200 USD
In between we should see wide swings. This will not go down in a straight line.
A reason, besides of social mood, would be, that outstanding USD based debt would see a contraction of around 90%.
Well, sounds unbelievable? Or not? We will see.
Short term I have now two scenarios:
a) target area for the recent move down is 1138 - 1012
b) we have seen a temporary low yesterday and are underway to test the resistance shelf 1375 - 1437 - 1500
Regarding Gold as the Crisis Hedge:
That is an argument we do hear quite often. But in times, when Gold is not used as money, Gold tends to rise when economy is expanding and falls when economy is contracting. You can take charts and figure it out........