Today, we check in with an asset that needs a break soon: gold.
Below today's price chart, you'll find an indicator called the "RSI." The RSI measures overbought or oversold conditions on a given asset. When folks go wild for an asset, the RSI can reach "race car in the red" readings above 80.
Gold staged an upside breakout in early October. Since then, it has enjoyed a monster $150-per-ounce rally. This rally has left gold badly "stretched" to the upside. The RSI's "overbought" reading is at its highest point in 12 months. When a market is this stretched, all it takes is a lack of buying to cause a sharp correction. (I've marked previous examples with red arrows.)
Long term, gold has a bright future. The U.S. government's crazed "spend and tax and inflate our way to prosperity" program is murderous on our currency... which will drive people into real money (gold) for years. But in the short term, gold is like a runner that has sprinted flat out for a mile. It will take a deserved rest soon.
Below today's price chart, you'll find an indicator called the "RSI." The RSI measures overbought or oversold conditions on a given asset. When folks go wild for an asset, the RSI can reach "race car in the red" readings above 80.
Gold staged an upside breakout in early October. Since then, it has enjoyed a monster $150-per-ounce rally. This rally has left gold badly "stretched" to the upside. The RSI's "overbought" reading is at its highest point in 12 months. When a market is this stretched, all it takes is a lack of buying to cause a sharp correction. (I've marked previous examples with red arrows.)
Long term, gold has a bright future. The U.S. government's crazed "spend and tax and inflate our way to prosperity" program is murderous on our currency... which will drive people into real money (gold) for years. But in the short term, gold is like a runner that has sprinted flat out for a mile. It will take a deserved rest soon.
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