Gold has been going up as the USD has gone up for the past couple of weeks — a sign that it has turned back into a risk-aversion trade after months of being a risk trade. The disappearance of gold from the newspapers may be one reason for this. An absence of bull market stories may have given investors time to revert to their natural propensity to buy gold as a shelter in hard times. That certainly seems to have been the case recently, as the European debt crisis has pushed the gold price up. It has now broken out above 1170, a high point since the price spike reversed in early December 2009. Today the breakout level was tested strongly — I waited for the market to pause for breath before entering, as shown on the 1-minute chart. My entry point is shown as a cross. Approx. stop level is also shown.

The question in my mind is how much information there is in the speed of the pullback. I am inclined to think that it is not specific to gold — this has been another day when everything has fallen sharply, and that may have given me an entry point into gold. As it was the breakout in gold held even though several other markets are having significant falls.