In our November 17 blog we looked at the chart pattern of Fidelity Select Gold Fund (FSAGX) and observed that if FSAGX holds its support, we could make a bullish case. Unfortunately the gold sector did not hold its support and now resumed the bear market.
Gold is the worst performing asset class in 2013 by far due to the fundamentals, including low and decreasing inflation, and low demand from Asia. The recent sell-off was triggered by renewed fears about an early tapering by the Fed, which in turn would strengthen the dollar and weaken gold. However, since gold prices are approaching production costs, we would not be surprised to see gold establishing a new support level in 2014. At that point gold stocks will be worth considering again as an investment.
Buy/sell signals for Fidelity funds are available at FidelitySignal.com