Dominic Frisby Says Gold Is Close To Buying Opportunity

Gold has gone for a tumble, but Dominic Frisby says that the drop is leading to another buying opportunity. Going through the charts, he notes that pullbacks and consolidation periods have been normal for gold during its present bull market. For most years, the metal has made its year low in January or February.

Since the beginning of this bull market, in seven of the last ten years, the low for the year in gold has come in either January or February. The exceptions to this were 2003, when the low came around late March/early April; 2004, when it came in May and 2008 - the outlier year - when it came in October. Based on this, there is a good chance that we are close to lows for the year.

Second, we are nearing my target stated a few weeks back of gold's 144-day moving average - the average price of gold over the last 144 trading days. That average now sits at $1,305, and rising. Since the crash of 2008, gold has consistently found support there....

In short, we are not far off the zone where - by my reckoning - some 'dipping back in' makes sense.

However, this does seem to be unravelling very fast. Perhaps I am being complacent here. We shall soon find out.

On a similar basis, also using a moving average, he also says that dipping into gold stocks through (say) an ETF is close to making sense here.


What if he's wrong, and the seasonality's off this time? What if gold's slated for an all-out correction?

That's really up to the buyer. Timing advice is really for people who want to buy the asset anyway. [Something to remember if a timer gets you excited with his or her patter.] If buying on the dips doesn't seem right, that could result from an intution or conclusion that gold itself doesn't make sense at this time. Given the risk, and if the desire to own gold is really there, a leg-in wouldn't hurt all that much.