Gold's long term chart shows how close we are to reaching secular support, going back several decades. As old resistance becomes support, we expect the peaks of 1980 (850 USD/oz) and 2008 (1030 USD/oz) will provide HUGE support.

Moreover, the psychological level of 1,000 USD is coming into play very soon. In sum, we believe the downside in the price of gold is limited.

Gold, Copper, Commodities Near HUGE Support Chart 1

It is not only gold, but also other leading commodities are nearing secular support levels. The commodities index CRB has arrived in the secular support zone. Now, do not underestimate the strenght of triple bottoms like this one which were set over +3 decades.

Gold, Copper, Commodities Near HUGE Support Chart 2

One of the leading commodities, in our opinion, is copper. We believe copper plays a fundamental role in analyzing markets and commodities. Its chart shows (in its own way) that critical support is near, as evidenced by the green dotted trendline which is less than 10% below today's spot price. Note that copper has corrected -50% from its all-time high, which is another way to say that the downside is limited.

Gold, Copper, Commodities Near HUGE Support Chart 3

Our conclusion is that we have reached huge support areas in leading commodities, as well as the commodity index. Do not forget this rule of thumb: Investors make their biggest gains when buying at secular support levels.

Given the stiff correction in gold and commodities, we do not anticipate a raging bull market as of the moment support is reached. Our view? The correction is commodities is mostly over, we see a stabilization coming in the form of a trading range around current price levels, with some bounces up and down. This is a great time to pick up oversold miners and producers.

Source: http://www.secularinvestor.com