Is Gold Ready To Go Back Up?

Last week GLD found support at the 50% retracement, the 50 day moving average as well as the bottom of a rising channel. In my opinion I think the bounce is technical in nature as every analyst out there is bullish on gold which makes last week's support level the ideal place to get back into this market.

I personally am cautious on gold and silver for several reasons. As I pointed out in a previous post, the gold stocks are not confirming this up move in the shiny metal. This non-confirmation is a red flag which alerts me to the possibility of gold selling off.

One another reason why I am cautious on gold is due to the fact that EVERYONE is bullish on gold and silver. I have not come across one analyst, blog or newsletter who is bearish or even cautious on gold. Whenever everyone agrees that the market is going to do a certain thing, it usually does the opposite!

Here's my take on gold. As long as gold continues to move higher you can stay long if you happen to be long already. I will however pay close attention to the lower channel line as a violation of this support line may signal further weakness for the yellow metal.