Gold bubble 2011

Gold has been progressing, as expected, ever since i started covering it in July. Some of you have brought it to my notice that other popular technical analysts on the web are predicting a crash in gold  starting soon, continuing into next few months. They see gold going below 1500.  I am not concerned about the direction of any market, as long as i am able to control my risk/reward in trades.  Ultimately this is what determines the success or loss in a trade.

Many analysts are giving target of 2000 and more on gold (note that all top analysts were predicting spx 1425 for 2011 Now they are all scrambling to revise that number).  My fundamental analysis supports a gold bubble continuation into 2012. The reason i am not so concerned about short term direction, is because i have firm support resistence levels established for trading. I trade these levels to reduce risk. So, i will change my views on a dime, if my support levels are broken, and that is the point when i will turn direction, and wait for a proper entry back into gold longs. (All of you know that I turned bearish at the right time, on spx).  Timing is critical in trading.

In terms of odds for profit, you can not get better risk reward ratio than what i am giving you.  This is the type of risk reward that major institutions trade on, and smart traders will have the wisdom to understand.  I mentioned my desire for 1690 long entry, (when gold was trading near 1665) with target 1826 and higher (2 weeks ago).  Upon further research last few days, now i set a target price of 1854.5  for gold futures.

This target is contingent on the following supports holding on gold futures.   The first support is 1722 followed by second one at 1714.  If this important support zone is broken, then i would turn  INTERMEDIATE TERM  bearish on gold, with a short target BELOW the 1665 price i discussed  in july. I will update the exact short target, upon the break of the support zone i have mentioned.  Resistance in the days ahead seems to be at 1772 and 1790.