Gold and a Dead Cat Bounce - Bob Moriarty
December 22, 2005
Gold bugs and nay-sayers alike have been through a roller-coaster ride over the past 10 days as gold tripped from $541 an ounce to $490 in the space of a little over a week and silver plummeted from $9.24 to $8.20. While I don't think gold or silver has hit the low for the correction, I do think they are in for a nice dead cat bounce and may well want to retest the previous highs.
Lest anyone confuse where I am coming from, it's obvious to me that we are in a long term bull market for all things real. Gold and silver being the most real. The Rulers of the United States intend to do as good a job of destroying our currency as they have done of destroying the Constitution. One day, not too far off, the rest of the world is going to figure out the dollar is nothing more than a trash currency and our Empire is going to disappear just as fast as the Russian Empire dissolved in 1979.
Someone emailed me today and pointed out that while gold and silver have taken a dump, by and large the gold stocks haven't reflected the drop in the metals. He is dead right and I remain mostly invested. Barb cashed out 25% of her total portfolio and got rid of the weak sisters before year end. And in fact her account hasn't gone down at all. (I've always wanted to be married to a rich broad}. As my grand-daddy used to say it's just as easy to love a rich girl as a poor girl, and a lot more fun.
In the days and months ahead, gold bugs will be rewarded many fold for their patience. But it's still wise to remember that when the cheerleaders are screaming the loudest, that's the time to sell. Still, for the next six weeks, I think fortune favors the bulls. When you toss a cat off a building, the faster it falls, the higher it bounces.
I'll continue to call them as I see them.
Bob Moriarty
President: 321gold
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