It’s incredible how many analysts are looking for a significant correction now in gold and PM shares. This type of skepticism is exactly what the market needs to continue pushing prices higher. These are the same analysts who weren’t afraid to declare a bottom and start buying with both fists every time gold dropped another $100, yet are now afraid to buy when gold is trending higher….and doing so in a healthy manner (eg while backtesting broken resistance and showing bullish volume patterns and chart structure). In the article link below, the author is looking for prices to come back to the 200dma, which I agree it will….eventually. The problem with his calculus is that barring an incredibly steep drop, if prices simply pull back slightly and then consolidate for many days, prices will touch the 200dma at a point much, much higher than it exists today. So while I agree with the reversion to an MA eventually, I think he’s being very unrealistic to think that level is at HUI 180. I will admit that he is correct in that if you were to plan to buy and hold for years with an entry at current levels, it doesn’t matter if you were to buy today or wait for a seemingly better entry….unless that entry never presents itself. After seeing clearly the inflection point in commodities is behind us, I think the greater risk right now for a long term investor is missing out completely because you tried to finesse the “perfect entry”. I also disagree with his notion of successfully trading in out of the market by timing the oscillations. Although he sells a service so I understand why he advocates that approach. Not much money to be made advocating buy and hold.

Danger Zone!

In fact, my black line on the HUI monthly chart below suggest that support will remain above 200 at this point. If prices dip below on a monthly closing basis, I think we need to seriously reassess.