Grandich point of view.
Special Bulletin from Peter Grandich February 22, 2004 8:00PM EST
Very short, but to the point. The next day or two of trading in the gold market could be the most critical factor to its long-term direction since it bottomed two years ago.
The gold market has been locked into a mentality of Euro up, gold up- Euro down, gold down. After getting hit very hard last Friday, gold has opened a couple bucks down in Asia on a further sharp drop in the Euro. Up until now, the gold producer community has held back from forward sales on the belief gold was heading higher and any sign it sold forward prematurely, would be viewed as a big negative by its shareholders. However, it will be very difficult for producers to sit on their hands with a price much south of $390, so selling can beget selling. Personally, I believe we can have a sharp reversal at anytime and this drop can only serve as a positive longer term, albeit tough to swallow at the moment. But as I approach my 20th year on Wall Street, I’ve learned a long time ago that what I believe is appropriate and what ends up happening in a market, is often two very different things. I think one buys the weakness here and catches a powerful reversal. |
