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Gold: Major catalysts ahead to trigger next breakout

November 23 2011, 08:44

FMX|Connect- WWW.FMXConnect.com (Reported on 11/24/2011)

Gold: Major catalysts ahead to trigger next breakout

Source: CommodityOnline.com

In bull markets, corrections and consolidations are needed to periodically cleanse the market of extreme optimism and an overbought condition. After a market has strong run it inevitably reaches a point of resistance. This is where there are more buyers than sellers. A market can correct in two ways. Either it declines and retraces much of the preceding gains relatively quickly or a market will consolidate near its highs for a long period of time. The first correction is a function of price while the second, time. The correction or consolidation ends when a fundamental catalyst emerges which triggers greater demand that overwhelms current supply.

The consolidation has endured due to a working off of the overbought condition from 2009-2010 gains as well as the lack of a real catalyst. The Fed, though accomadative has been on hold while emerging markets turned their focus to inflation. To read the full article, Click Here.

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