Today, gold is holding at around the $1,670 level. We are therefore waiting to see if we are going to get to our next sell level of $1,690 any time soon. Of course, we may see some heavy profit taking and gold could fall back down to under $1,640. What would we do then? Yes, we’d buy the weakness of course.
Don’t forget, we sold into $1,640 only three days ago so we are not going to re-purchase at that level – not after such a short amount of time. If gold traded at around $1,670-$1,700 for a protracted period we would “re-set” our baseline and would then see a drop to $1,640 as being $50 of weakness. A move back down in a couple of days does not count in our books and we would be looking for greater weakness in order to continue buying.
This may seem like the barbarous relic being over picky, but we have found that this method has great merit and we stick to it through thick and thin. It works for us.