About BCA  Our Services  Contact Info  Careers  Help  BCA In the News  Home Gold: Finding Support? 10:37:00, May 12, 2008 The gold bull market is over for now but further downside in prices should be limited. Gold prices took a disproportionately large hit the minute the dollar firmed a bit. Extreme dollar pessimism attracted a lot of speculators to the commodity pits in recent months, as an aggressive outlet for playing a weaker dollar. Correspondingly, there had been a lot of hot air in this market (note the huge gap that existed between the spot price and the 200-day moving average). In addition, bullion prices tend to be quite sensitive to changes (real or perceived) in the liquidity backdrop and have lost some of their support because the Fed is almost finished lowering rates and the ECB has been downplaying the odds of a rate cut. That said, the liquidity backdrop is not going to turn bearish (despite widespread inflation fears), nor is the dollar likely to move up much. Thus, the uptrend is on hold for the foreseeable future but gold prices should find support near the 200-day moving average (around $800). E-mail this article This report was published by Daily Insights Click here for more information. Previous 50 Features           May 05: U.S. Payrolls: Still Contracting, ... May 02: Brazil Makes The Grade May 01: Is The Fed Finished? Apr 30: Is The Fed Getting Ahead Of The Curve? Apr 29: Commodity Plays: Further Upside Ahead Apr 28: Japanese Inflation: Much Ado About ... Apr 25: U.K. Consumer Spending: Rolling Over Apr 24: Oil Spike Warns Of A Further De-Rating ... Apr 22: China: Fast Versus Good Growth Apr 21: U.S. Leading Economic Indicator: ... Apr 18: Agflation: A Risk For Emerging Markets Apr 17: U.S. Inflation: Lots Of Food & Energy, ... Apr 16: The Sources Of U.S. Consumer Misery Apr 15: U.S. Consumers Are Spent Apr 14: A Correction In Oil Prices? 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