Wednesday, February 9, 2011

Precious metals and the validity of technical analysis

Last month’s drop in the price of gold was accompanied by almost universal recognition of a head-and-shoulders top, one of the classic reversal patterns recognised by technical analysts. This is a pattern that marks the end of a trend; the end of a bull or bear market, or at the very least a bull or bear phase. But how relevant is technical analysis to precious metals?

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