Gold due for a pause?

For those who missed the run up in gold from November lows, you still have time, but now is not the time to commit new money, or even add to existing long gold positions. Technically, gold is still in a secular bull market that started as far back as 2001, but like any asset, prices don't move up or down in a straight line. Last week's up move in gold was breath-taking, so it's due for a pause or a correction at these levels. That's actually healthy, as it builds a stronger demand base (buyers) without the inherent froth of manias (we will experience that later when the general public drives up prices in a buying panic).

If anything, a correction is welcome, as it enables a lower entry point for long positions later on. Once the charts and the Moving Average Convergence Divergence (MACD) turns positive again, it will re-confirm our bullish posture. Until then, keep your powder dry and wait for that next opportunity.

GLD Price Chart and MACD Indicator