I haven't a clue where gold is going. Technical trader Adam Hewison seems to have an idea. I just received an email from him. He says if gold breaks through $980, it can go to around $1,500 by March 2009.
Adam writes, "I still believe that stocks are in a bear market and that we can see a trade down to the 10,000 level basis the DOW. Having said that, I would be trading gold from the long side until our "Trade Triangle" Technology points to a change in trend direction. With the technicals all in place, and the fundamentals certainly pointing to higher gold prices, I think traders should be looking at this market from the long side. Some of our cyclic work indicates that gold could be strong until February or March of 2009. "
Adam thinks traders should buy gold on pullbacks. For more details, check out the video he posted here.
I'm not a big fan of technical trading. I think daily price moves are either random or news driven. I don't see how charts can predict either. This is a great opportunity to see if INO's trade triangles work. The SPDR Gold Shares ETF (GLD) closed at $89.18 on 9/22/08. Let's see where it is in March.
I hope Adam posts updates when he thinks further developments undermine his current prediction.
Update 10/14/08: Adam has posted a new video on gold (along with crude oil and the dollar index). He now says that if gold goes below $817.45 an ounce, he will go short. GLD is currently trading at $82.69.
Update 10/16/08: A new video has been posted. Gold has gone down, through the $817.45 level, so Adam went short. His target is for $720 to $700 an ounce. The gold ETF GLD closed at $79.29. The video also includes technical analysis of the miner Barrick Gold (ABX).
Update 10/27/08: After going below $700 an ounce (that's a very nice short sell from $817.45), gold is now around $732. Adam thinks that there might be a rally to $795.
Update 11/27/08: Looks like Adam was right. Gold is now around $810 an ounce. There haven't been any new free videos posted (as far as I know), so I don't know what he's thinking next.
If you are interested in retracements, here's a pretty good, older video on the subject.
Disclosure: I hold no positions in any assets mentioned above.