With Gold crossing below its 100 day moving average last week (after crossing below the 80 day the week before, and 50 day the week before that), some managed futures prorgams we track were seen exiting long positions in the metal. With Gold having gone nearly three months now without making a new high, a few are starting to wonder if the trend is finally over for Gold? Or is this just a breather for the yellow metal before powering higher?
While only down -5.45% since making a high of 1421 on 11/09/10, Gold has failed to break above the 11/09/10 high for 73 days now, although it came close on 12/07/10 (1420) and 1/03/11 (1420.30) to make a case for a triple top.
This got us to wondering what the average time between new highs has been in Gold since the most recent rally began in October of 2008 (up $631/oz, or 88% since 10/24/10), and we found that the average time between new highs has been just 13.72 days. Even more impressive, Gold has averaged a new high every 17.8 days over the past 10 years while moving from $264/oz to $1,343/oz. The longest time between highs, meanwhile, has been 200 days for the current 08-present rally, and 548 days for the full 10 year period.
What will the GLD and all the Gold as 10% of your portfolio people be doing if we break that 548 day record by staying below the Nov. 2010 high for another year and a third ??? Only time will tell, but I don’t think it would be pretty (Gold $600, $800?).
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