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‘Golden Cross’ Signal Suggests $3,500 Gold Price
by Dominique de Kevelioc de Bailleul / Beacon Equity Research
Probably the most significant indicator employed by technical traders to signal them to initiate trades triggered a very important ‘Buy’ signal on Thursday.
The well-known and ubiquitously-used technical indicator, called the ‘Golden Cross’, gave the ‘green light’ to scores of buyers of gold bullion, when the price settled above the $1,770 level on Thursday.
And the last time the gold market reached a Golden Cross moment, the point at which the 50-day MA crosses the 200-day MA, gold bullion rallied to $1,917.90 on Aug. 23, 2011, from approximately $938.00 set on Feb. 11, 2009—a slightly more than a double price move within 31 months.
Prior to that, the Golden Cross triggered another major buy signal on Aug. 10, 2005, when gold touched $441. Twenty months later, the gold price broke through $1,000 for the first time ever, touching $1,032 on Mar. 17, 2008, for a gain of 134 percent.
Seemingly lofty and daring predictions of gold $3,500 may not seem so lofty or daring, after all. While the gold price has resumed its 12-year secular bull market, following the QE3-to-infinity decision by the FOMC on Sept. 12, the target price for gold to top out at the peak of the next bull phase calculates to $3,894—$1,770 X 120 percent.
Read more: http://www.beaconequity.com/golden-cross-signal-suggests-3500-gold-price-2012-09-24/#ixzz27OwWjexL
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