![\"280613_PC_leong\"](\"http:\/\/www.profitconfidential.com\/wp-content\/uploads\/2013\/06\/280613_PC_leong.jpg\")
<\/a>Back in April, I said gold was looking bad on the chart and that as long as the stock market continued to advance higher, the prospects for gold were dim. (Read \u201cIs Gold\u2019s Near-Death Crisis Over-Exaggerated? Concerns of a Market Meltdown May Not Be<\/a>.\u201d)<\/p>\nFast-forward two months, and while stocks have been in a minor correction, there continues to be distaste for holding gold.<\/p>\n
The reality is that inflation is benign and will likely stay that way for a few years. The world\u2019s central banks continue to drive easy money into the system and investors are looking elsewhere to make money, ignoring the precious metals, especially gold, traditionally a safe-haven investment.<\/p>\n
The problem now is that there\u2019s really no need for a safe haven at this juncture.<\/p>\n
Gold<\/a> is down 36% from its peak of $1,920 in September 2011, and it\u2019s not looking good.<\/p>\n I even feel that gold is vulnerable to $1,200 on the chart. Take a look at the long-term chart of spot gold featured below. The lower support appeared to be in place until the slide on Wednesday to the $1,224 level. The threat now is that gold could continue to break down and make a move toward $1,200. If this happens, we could actually see a move down to the $1,100 level, based on my technical analysis.<\/p>\n Chart courtesy of www.StockCharts.com<\/i><\/p>\n Of course, the futures market appears to be betting on a rally. The contracts all the way out to December 2018 show the spot price above $1,200, but I have seen this more positive sentiment before, and it subsequently failed to pan out.<\/p>\n Even if gold holds, the upside over the next several years appears to be limited. The highest level is $1,407 for the December 2018 contract.<\/p>\n My view has not changed. I have little confidence in gold as an investment. You could make some money trading the commodity on weakness and selling on a rebound, but in my opinion, the bear market<\/a> in gold is here to stay\u2014at least for the immediate future.<\/p>\n Of course, some gold bugs talk about the fact that the ore is a limited commodity based on what is in the ground, but this supply needs to be found and extracted.<\/p>\n Also, India and China may be major buyers of gold, but both of those countries are facing some serious growth issues; I don\u2019t see the demand surging to levels where it will impact prices.<\/p>\n For now, I just don\u2019t see the heavy demand that could spark gold to another rally, so I\u2019d suggest you stay out of the yellow metal unless you\u2019re a trader. Holding gold for the long term isn\u2019t going to make you rich.<\/p>\n![\"Gold-Spot](\"http:\/\/www.profitconfidential.com\/wp-content\/uploads\/2013\/06\/Gold-Spot-Price-Chart.jpg\" "\\"Gold-Spot")
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