Gold is still solid - a buy on IMF intervention (Europe)

An interesting current psychology of the markets is the risk averse plays are still holding ground, such as the US dollar and gold. Greece is but the tip of the iceberg of European problems with sovereign debt as discussed in Don't dismiss 'Gold' the crisis hedge just yet- 2010 and Prepare yourself (and your portfolio) for a coming debt crisis and a Chinese hard-landing (crash) 2010 - (update 3) Spain would be more of a shock to the markets when the news starts to filter through about it's deficit problems. The UK is of course a major market worry hence the selling of the pound lately. So generally the EU is in a lot of problems, benign growth and debt issues make the Euro currency attractive to short sell and also the UK pound; a full blown currency crisis in the EU may be on the cards in 2010/11.

If IMF intervention is to bail out the larger economies such as Spain and possibly the UK at some point (relying on Germany/France to handle Greece), not only will gold inevitably becomes a hedge against falling currencies, but also a hedge against a full blown fiscal crisis in Europe.

*Note: the short term break out at 1062, gold may show overbought signals moving up towards the outer bollinger band. But, if we can a good dose of 'bad' news over Europe, gold hold above the 1060 resistance and possible hold.

Current 1137. Below graph is daily



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