Commodities settle down, but gold is looking exciting

Most commodity prices have slumped in the past year – except one. Gold looks very exciting – in fact, it could be heading for a legendary bull market. Here’s why.

As we never tire of saying, when you don't know, then technical analysis will, more often than not, provide the answer. Genuine students of technical analysis live in an osmosis-driven world where the price action of all financial assets is constantly monitored over both long and short periods; this process delivers a deep understanding. If you know what's happening to the price of everything, you know when someone says something wrong. It's the same experience as hearing a piece of music for the first time and a member of the orchestra plays a wrong note; without knowing the piece, you still know it was a wrong note.

From the chart of the CRB Index of commodities, it can be seen that the collapse may have stopped, near enough to the long-term lows to be considered to be a level of technical support. If we look at the daily chart, we can see that the character of the chart has changed. From June last year the price fell steeply, with only modest upward retracements immediately followed by steep falls. Since December 2008, however, the price has gone sideways in a trading range and the downtrend has been taken out. Could this be the point of reversal?

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