Gold – A long cycle Metal

by Laura Ehrenberg-Chesler on February 15, 2013

in equity market,gold,inflation/deflation

There was an interesting conversation this morning on CNBC about gold.  Specifically, one of the analysts mentioned gold as a “long cycle metal”, meaning when it starts moving in one direction or another, it tends to do so for a prolonged period of time.

Gold has recently broken through some technical support levels, and there has been a noticeable lack of buying recently.  This lack of interest in gold may be attributed in part to the improving fundamentals in the economy.  Jobless claims recently fell more than expected, consumer sentiment is better, and the housing market is improved.  Additionally there has been an increased appetite for risk, due in large part to the better economic data, so more investors are looking to the stock market to benefit their returns.

It’s hard to say if this is the beginning of a new “long cycle” for gold, where the trend is down, but for gold bugs, and the rest of us, it certainly bears watching.

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