Gold, Gold, Gone

I do not disagree with the premises of higher gold prices in the long term due to the enormous liquidity injection from the Fed. But as a trader, one must trade according to the near term trend. The near term trend for gold is down, and therefore I am bearish on gold in the near term. As the chart below shows gold most likely will not see major support until it reached the 835 level, or even down to the 800 level. When fears return to the equity market, gold could become a safe haven play again and that might give some near term price supports. But in order for the price of gold to move above the 1000 mark and beyond, the inflation picture has to come into play. Inflation will not return until the recession has ended and the recovery phase is well underway. From the latest statistics, the contraction of the US economy has slowed, but the contraction has not stopped. This imply the recession has not ended.