Gold's 1980 Bubble Compared to Now

10/08/2010 10:16 am EST

Focus: COMMODITIES

Thomas Aspray

, Professional Trader & Analyst

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Over the past few weeks, the high degree of bullishness on gold has made me nervous as all the bears appear to be hibernating. If we look at the recent rally from the July 2010 lows and compare it to gold’s rally in the fall of 1979, the difference is dramatic. In 1979, gold was up 129% in about 52 days as compared to 18% in 50 days. Gold reversed to the downside on Thursday on heavy volume, which may be the start of a deeper correction. Initial support is at $1320 with the 38%-50% Fibonacci retracement zone at $1262-$1288. Our target at $1362 was reached this week.

Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.

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