Secular, cyclical, long-term,intermediate term – there’s lots of technical terms analysts throw around when it comes to analyzing markets. But, what do they really mean and how can that help you understand the gold market from a macro perspective?
A secular trend generally refers to the largest timeframe of all when it comes to market views —it refers to the 10-20 year major trend for a market. Within secular bull trends, however, minor cyclical counter-trend bear trends can evolve.
Traditional Fibonacci theory explains that markets can “retrace” or correct portions of moves without harming the larger overall trend. Recently, gold has tested on two occasions—but held the 50% Fibonacci retracement support. From a long-term trend perspective, the uptrend remains intact. Additionally, long-term momentum seen below the chart is generally rising and supportive.
Bottom line: When it comes to longer-term investing it is always valuable to step back from the trees and take a look at the forest. While gold has been buffeted higher and lower in recent weeks by lots of short-term noise, these measures of traditional technical analysis show the long-term secular trend isn’t over yet.
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