Having said that, if someone is looking to put a lot of money into gold at once, now may not be the best time. I base this view on 2 main observations. First, nothing goes straight up or straight down in a trend. The dollar has been getting pounded for some time now and it has accelerated into what I recently referred to as economic noise which was the downgrade of the US credit rating from AAA for the first time ever. Trust me, it will not be the last time we see a downgrade but people have been piling into the electronic version of gold (the GLD fund) in anticipation of this news. Markets often like to "sell the news", especially if the "big news" turns out to be non-news over the short term (which is what I expect the AAA credit rating loss to to turn out to be). As a result it would not surprise me to see gold take a nice breather here which could be a good buying opportunity.
And then there is the chart analysis. Elliott Waves are my preferred mechanism. As you can see from the chart below I count 5 waves up as being near completion in the formation of the 3rd wave of an ongoing bull market for gold. According to this model, the 4th wave should be a significant pullback and it will likely retrace 38.2% and potentially even up to 50% of its recent gains since wave 3 started in the $650/oz range. For now I will assume it is just going to be 38.2% which would have it reverse back up into wave 5 to top out at perhaps $2000-$2500/oz.
Of course, all this is model based speculation. Serious gold buyers who are trying to save for their retirements (instead of speculating and gambling on the monthly or even yearly swings in gold price) will probably be best served by continuing to buy more gold at regular intervals. They will do this no matter what gold's dollar based price is. As a result, sometimes they will buy the peaks, sometimes the dips. But if you are someone who is beginning to panic at the state of the global economy, now is not LIKELY (a word meant to convey the chance associated with trying to time the markets...) the best time to make a big purchase. One thing to look at on the chart below is that the buying pressure (represented by the red and white "candles" in the chart) has been extreme (nearly all white) during what I am interpreting as wave 5 of 3. This type of panic buying is often an indicator of a top of some type. So what to do with your wealth if you feel compelled to be a trader? Well, cash might not be such a bad hiding place for awhile.
Of course, in a world run by dishonest money you should always consult with your costly financial advisor even though they have no better insight into the state of global economic affairs than your average blogger who works for free. If the world was run by honest money, there would be no need for any of this foolishness because common sense would be a good indicator of reality. Not so when funny money is running the show...
