Gold Southbound, Box-Bound

Returning to San Francisco is always tough enough, but try this for a bring-down: well into our 10th year of faithfully penning The Gold Update without a single Saturday miss, en route (for those of you scoring at home) toward edition No. 500, yours truly walked into last Sunday's Investors Roundtable and the first thing out of a valued member's mouth was "The price of Gold may never go up again."

Moreover, correlative evidence was provided as proof. (It's an analysis we'd need to personally number-crunch before rendering a like opinion -- heaven forbid -- and it esoterically is relative to the movement of Japanese interest rates ... or lack thereof.). Rather, our preference is to remain fastidiously steadfast for far higher Gold prices as the 3Ds of Debasement, Debt and Derivatives continue to disseminate.

But specific to this week's title for Gold being box-bound, price now obviously having gone down to be so bound, we're appropriately put in mind of the rocking Allman Brothers blues tune from 1973, "Southbound, Lord I'm comin' home to you" ... home in this case being The Box (1280-1240). Gold this past abbreviated trading week dropped to a fresh low (1273) for the year. Price settled Thursday at 1278. It's Gold's first weekly closure back inside The Box since December 21. So much for Neverland (aka "The Whiny 1290's") lending support, albeit price did therein dance around and about for these past eight weeks.

Still, after a very slow start of same duration with the current parabolic Short trend of little price decline whatsoever, this past week was more of a downside kick in the teeth. Recall herein written two missives ago: "As for the 'Baby Blues' [in reference to Gold's linear regression trend analysis] ... their decline ... is cause for further downside concern..." Well, you know our old quip: avoid the news, trade the Blues, else lose your shoes. And in turning to Gold's weekly bars, the southbound route has now become a bit more obvious:

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