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Two Ways to Buy More Gold for 2013

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"The high level of bearish sentiment early in the summer and the seasonal tendency for gold to bottom in July created a good risk-reward entry point, but another opportunity to buy should be just around the corner."

Forbes, Tom Aspray

The 8.8% gain in the SPDR Gold Trust since the May 30 low is finally starting to get some attention from traders, as short-term bullish sentiment has increased. Mark Hulbert's analysis of short-term gold timers has risen 50% over the past two weeks.

On the other hand, investors seem to show little interest, as gold has been correcting for almost a year since it peaked in September 2011. Long-term bull markets, like that in gold, are characterized by periods of consolidation in which investor sentiment changes dramatically.

These pauses on the charts can be identified as continuation patterns, and the length of the pause can often be correlated to the level of bullish sentiment. When gold peaked in December 2009, the resulting correction lasted only three months, as that was long enough to turn many traders negative on the yellow metal.

The sentiment in the summer of 2011 was much more extreme. It was not until May and June that some long-term precious metals bulls began to turn more cautious. . .View Full Article


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