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Richard, taking profits after a 20% gain is a solid move in the short term, a good trading practice. I would respectfully disagree about the long term POG. While it may well, probably will, test the 280-300 range in the near future, the fundamentals have changed. The central banks which control a majority of institutional reserves have admitted that gold is money. Were gold only a commodity used in jewelry and the electronic industry, I would agree with you. Should gold, the barbarous relic, be money in the modern age? Of course not. Are politicians human (prone to greed and shortsightedness)? Afraid so. Hence, fiat currencies inevitably devalue, and good old gold, good as gold (with its slowly increasing supply, indestructableness, and resistance to counterfeiting), remains as a yardstick, as a balancing measure between currencies. Some bankers profited mightily by pretending this was not the case, leasing (not selling) gold to the carry trade, and letting the price drop. The situation got out of control, and the Europeans acted to reverse the trend. Finally. None of this means much if you are trading short term swings. But long term investors should IMO hold until a new price range is established, and the mining companies have adjusted. This may well take a year or two and be accompanied by wide swings. I think we will see VGZ trading above .50 in that time period. We'll see. |
