Gold vs. Saudi Stock Market (History repeats itself)
Was it normal that the Price of Gold has gone into a sharp decline? In my opinion, the sharp decline was expected, since the gold has formed an exhausted Gap around $1673. Now where will it be in the next move? I think it well decline 10% more towards $1506 range on short term but this could be extended to October were real downtrend will be revealed. However, on long term more than a year the gold is expected to decline below 1000 and within 3 to 5 years it will hit $300 range.
Despite the quick upwards return for Gold, I called this a reactive consolidation that is around $1807 and during September and based on similarity of history with Saudi Stock Market Index, Gold could go towards 2100 and this makes sense in order to have an oil price near to $170 and also to fill the gap on the silver at $48 in a very short period. However, the Gold as we have mentioned previously it has entered a very critical zone, and with such huge variance, a long with other bad indicators, I believe that it will end up with abrupt collapse not a faraway from October 2011, please see the Gold vs. Saudi Market graph included.
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