So I took a look at the chart for gold today and realized that gold dropped and then bounced off its 50day moving average twice. This is definitely a bigger drop than the fall silver did. Check out Gold & Silver Correction Over? for a brief discussion on last week's silver price movement.
Furthermore Stochastics has fallen to oversold regions and now show a buy signal, with the signal line cutting the red line upwards. These two indicators lend weight that the correction is indeed over and that buying will resume and that prices will go up. However that remains to be seen.
This video from Zen Trader, entitled Why Gold Could Fall to $900, provides more insight into the recent run up that gold has had, pointing out strong negative divergence between RSI and Price which could indicate a correction of about 35% or more, bringing down the price of gold to $900 thereabouts. This video is cluttered with other charts so if you want to listen to the brief discussion on gold, you gotta scroll to about 8mins 30secs.
Anyway, I'm not buying gold for now despite the recent dip to the 50day ma. I've put enough of my funds into this metal and am rather satisfied with the allocation. That's not to say I won't buy if it does drop to $900/oz though.
Personally, I believe silver is still a better buy in the long run and am holding onto my funds while I wait for an attractive buying price.
Wish me luck! =)
~K
