Gary > So where does it go from here?
I guess it all depends on who you ask.
If you ask a goldbug he will tell you that gold has made a major secular reversal and is now on its way to $400, $500,$600 etc. Just a matter of time.
I think you know my opinion, which I have expressed many times previously, that what we are looking at is a speculative run in the gold price and gold shares based mainly on paper instruments and driven by fears of USD devaluation. I am not particularly impressed by the mythical 15,000 tonne short position of the bullion banks nor by excitement, which I read round the place, that every Chinaman is shortly going to be buying a one ounce gold coin, both arguments which I have heard for years and without actually seeing or hearing any real evidence for either.
You speak about the pennant formation in the gold price chart and I agree with you. In fact, as far as I am concerned, if there is anything "fundamentally" bullish in the gold price it is the pennant and also that the uptrend, which began in early 2001, has not been violated. So, if you are a chart believer you are obliged to remain in, come what may, until either the pennant or the uptrend has been violated or both.
And, if you do, you can then allay any anxiety which you may have by thinking about all that "missing" gold which has to be bought in or else about 500 million Chinamen lining up outside their bullion supermarket each to buy a one ounce gold coin.
And I'm not forgetting the $7 trillion US debt which can never be paid off and can only increase.
And, if it makes you happy, you can also throw in an "end of the world" scenario, with the ghosts of bin Laden and Saddam Hussein etc etc, just for good measure. |
