![\"stock](\"http:\/\/www.profitconfidential.com\/wp-content\/uploads\/2013\/08\/190813_PC_george.jpg\")
<\/a>When gold failed to hold above $1,800, I became skeptical. The stock market was on fire, so why would anyone want to buy gold<\/a>, as the easy money was already made? Then we saw spot prices fall below $1,700, $1,600, and then $1,500…when I turned bearish. (Read \u201cIs Gold\u2019s Near-Death Crisis Over-Exaggerated? Concerns of a Market Meltdown May Not Be<\/a>.\u201d)<\/p>\nWell, fast-forward four months, and I continue to be neutral-to-bearish. I just don\u2019t see any point buying the precious metal at this time: there\u2019s minimal inflation and the world is not going to blow up anytime soon, plus you have so much money funneled into stocks.<\/p>\n
When gold broke below $1,300 towards $1,200, I suggested traders buy on the dip, but also sell on rallies. That\u2019s still my contention at this point; with the spot price at $1,326, I would not be a buyer. Now, if the yellow ore fell below $1,300, I would consider buying as a trade.<\/p>\n
If I\u2019m wrong, then so are investment gurus John Paulson and George Soros, who are running for the exits and divesting a major portion of their gold holdings. According to filings from the U.S. Securities and Exchange Commission, the SPDR Gold Trust run by Paulson sold off over half of its gold holdings in the second quarter. I simply wouldn\u2019t be betting against these two.<\/p>\n
The global demand is also at a four-year low, according to the World Gold Council. The organization attributed the decline to investors selling bullion funds and lower buying by the world central bankers. (Source: Harvey, J. \u201cGold demand hits 4-year low as investors pull out \u2013 WGC,\u201d Reuters web site, August 15, 2013.)<\/p>\n
When I look at the chart, I cannot say there is any optimism. After a series of multiple tops at $1,800 in 2011 and 2012, the metal has been sliding as I discussed.<\/p>\n
The chart shows some support, but I believe prices could falter again towards the next Fibonacci Level, at around $1,210. Goldman Sachs has a $1,200 target on gold; failing to hold here, the metal could slide to around $1,050.<\/p>\n
Chart courtesy of www.StockCharts.com<\/a><\/i><\/p>\n Whatever the situation, I still see more downside risk than upside potential, based on my technical analysis. The supporters will tell you how the metal is limited and how you need to accumulate positions. While I do agree with this, I just don\u2019t feel it\u2019s that time just yet.<\/p>\n![\"Gold-Spot](\"http:\/\/www.profitconfidential.com\/wp-content\/uploads\/2013\/08\/Gold-Spot-Price-Chart1.jpg\")
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