<What if this move in gold is not being caused by liquidity?>
Then my theory will be wrong. I've looked at fear (and events) also, but feel it's only a short term influence. If you are talking about an all out panic that might be different, but I don't see that as a tradable indicator. What would you do, hold and hold, and pray for the perfect storm? I really don't like that approach intellectually, but I don't have all the answers, and who knows, it might be the one that works? What I really think is that gold and mostly HUI has caught a good bid from all the excess liquidity around the world that has few places to work, other than speculation.
My trading goal in the sector has been to lighten up when I feel the risk-reward is negative in a significant way. If you go back, you will only see me pulling in the horns a few times over three years: correctly in a major way in June-July, 2002: in a minor way in January, 2003: correct, but probably didn't really matter much, and now in a major way. |
