Medium to Long Term Gold Outlook

Gold has been really on the move recently within the last couple of months. A few months ago my analysis revealed that once gold broke $980/ounce, it would be in for a great rally. At that time I suggested to others a $980/ounce break would be a great buy signal and time for them to increase their gold exposure. It did break the $980 level a few weeks after I said that and it is now a large 14% higher, $1,119/ounce, only months later with barely any signs of slowing.

Many of the worlds greatest investors and fund managers have been increasing their exposure to gold, mainly earlier this year is when they were adding to their gold positions. These guys are the best, Billionaires, whom I am referring to, and I applaud them for getting into gold earlier this year before its big rally.

So with these hedge fund managers and I calling this big rally of recent in gold earlier this year, where do we stand now?

Gold may have a little further to rise in the short to medium term, but in our view not much further. It is time for you to start taking some profits on any of your exposure to Gold, or begin scaling out of your Gold holdings, EVEN if you are a long term investor. It would be wise for you to at least take some profits soon and buy Gold back at a better price you will certainly see as soon as next year.

I know that many of these fund managers I was referring to have their targets on Gold not much higher from here, very near $1200/ounce or only several percent higher from here. From our proprietary research, we know why these fund managers have their targets close to the current gold prices.

With both a combination of technical analysis and fundamental analysis we have set our medium to long term outlook on gold as BEARISH, meaning that we believe gold will be lower by Mid-2010 and head even lower from there, and its drop should start within a couple of months. In the end, if you are a medium term, or even a long-term buy and hold investor we advise you to take the majority of your gains on any gold holdings, or gold related (stocks, etf's, etc...)holdings by the end of 2009. ONLY if you are a short term investor/trader, less than a couple of months time frame, should you be buying gold at these levels of $1119/ounce.

MEDIUM - LONG TERM GOLD OUTLOOK: We are bearish, gold should head DOWN. Our analysis is that gold should drop at least 20% lower, or to $900/ounce, in the medium-long term.

We view the recent price action in the chart below as a clear BUBBLE, be prepared early for its inevitable pop:

(click on picture to enlarge)