Gold Chart

Took a look at the weekly gold chart today. It looks to me that gold is now finally oversold. The media seems to be blasting it nonstop left and right. Taking a look at the RSI (relative strength index), it looks to me that gold will have a reversal sometime in the next week or two.

Currently, there is overhead resistance at $1400, and the next one would be around $1430 if we do push through $1400.

On the downside, the key levels would be at $1350 and $1325.

As for my long term outlook, I am very bullish on the gold market. The only time I will be turning bearish is when we have positive real interest rates and when central banks stop their QE (quantitative easing).

For those not familiar with what QE is, essentially, central banks are creating money out of thin air and purchasing assets. Typically they purchase their own government bonds, however, the federal reserve is currently purchasing mortgage back securities as well, which has increased demand for housing in the United States. The Fed is currently printing about $80 or $85 billion a month and the Japanese are planning to double their money supply.

All this can only be bullish for gold and silver in the long run.