Gold is not doing well these days and I think the risk of heading down is much bigger than going up in the very short term. Normally you should see gold going up when the world is falling apart and the market is in panic selling. But it didn't. The gold price action is signaling that it wants to go down. Technically, it is showing a double top pattern, which often indicates a bearish trend. I think there is a good chance that gold may go down to low $1700s. If it breaks through that support level, then dropping down to $1500s is not something unthinkable. Having said that, it is just a short-term volatility and I have no doubt that it will bounce back to new high pretty soon.
Actually gold stocks are a good buy right now. There is a very big divergence between gold and gold stocks with the latter lagging significantly behind. In other words, gold stocks are cheap relatively to gold and they usually catch up. I think they are very attractive right now. If you are interested, please read my previous blogs on gold stocks.
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