All these discussions about gold moving much higher make me wonder if the volatility of gold will rise along with its price. If so, is it possible that we will see moves as big as $100-$200 in a day? I would appreciate your comment.
Our answer is that it is certainly possible, most likely in the third stage of the bull market. In early May 2011 gold moved lower more than $30 in one day. If gold was trading at approximately $5,000, then a move of similar range (percentage wise) would amount to approximately $100. However, the volatility is likely to increase in the following part of the bull market, so moves above $100 are certainly possible.
Please note that it will be these volatile times when the technical, cyclical, fractal analysis will be of particular importance. Not necessarily to time weekly moves, but to make it much more likely that the major tops and bottoms are detected. Naturally, there are no sure bets, but without these tools (and relying on fundamental information alone) one's chance for making good transactions will be very limited at that time.
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