The next few days will be critical for gold, as we have now reached the lower trend line. Today, gold is trading higher for the first time in eight days. Yesterday, we also traded higher for awhile too, so it is too early in the day to draw any firm conclusions. So far, the price of gold has not breached yesterday's high. If we close higher today, then it will be a sign that we have may reached the bottom, or are very close to it.In a deflationary environment, I would expect that eventually, the price of gold will also plunge. Gold, as an indicator for fear and/or inflation, is sensitive to shifts in sentiment regarding either one of these -- fear or inflation.
