Without Question, if You've Only Got got a Single Contrarian Bone
in your body, it should be aching like hell right here on gold. I mean, I have never seen a group of investors more prone to worry, and, they've been like that since Christmas. Since then, it's been nothing but a mudslide, in sentiment and prices.
I sold my GG last week, after asserting I would never sell it. I took a %12.00 loss. I was not even anticipating this week's swoon. I have kept my physical silver. At this point, I may feel more comfortable in accumulating more physical silver on weakness, than owning any gold stocks.
Do you remember my post, where I wondered if the hedgies might be tempted to go short crude, long gold? Well, only one half of that trade has worked out.
The attempt, right now, to get contrarian on gold's downtrend feels alot to me like the attempt late last year to get contrarian on the Dollar's downtrend. Sometimes the trend keeps going even when it seems the whole market is on the same side. One problem is that you can have counter-trend concensus action that can develop very quickly, which makes a hash of it. Being contrarian has become popular. It has entered the popular consciousness. That's what happened last year with the USD. I remember a bloomberg article in November in which currency guys were interviewed from Sydney to NYC to London. They all agreed the dollar was going higher. The reason they gave? Because everyone agreed the dollar was going lower. (And here we are, 6 mos. later, with the USD finally going higher--even the Economist and Newsweek covers on the USD did not trigger "immediate" USD upside action--though we are only 2-4 mos. beyond those covers.)
I must say though, I don't even see a counter-trend consensus right now on gold. It really does look like a wipeout, with pretty much everyone anticpating more punishment. So that would suggest a nibble, at least.
The problem I see is this: what if gold can't be relied on anymore, to perform its historical role as safeguard? How many in the gold community ask that question? Hardly anyone, right?
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