(click to enlarge)
June Comex Gold is ever so slightly still in an uptrend after having gone parabolic. The recent selloff, to me, is not a downtrend the way I define them – just profit taking. June futures would have to sell below 1180, else the steeper trendline is holding. Once it’s broken though, you’ll probably see a reversal back up before the lower trendline at 1130 broken. Either way, it’s going to be volatile.
(click to enlarge)
The SPDR Gold Trust (NYSE: GLD) is still in an uptrend too. IMO, I don’t think anyone would want to be short GLD nor gold futures. Maybe day trade on the short side, but that’s it. I don’t know anyone who’s taking shorts home with them.
The world is raising cash TODAY. That IMO is what gold traders should be focused on for any severe sell-off. In other words, I don’t think that the fundamental reasons why you’d want to be a gold bull are changing, but you have to manage risk TODAY, not based upon your 5-year thesis about how gold gets to $300 on the GLD or $3,000 basis December 2012 futures.
Traders should be incorporating a “dry powder” mode more than ever. If there’s a “flash crash,” currency intervention, and bona fide market crash, you want to be on the other side of the dysfunction.
Martin, your thesis writing is getting much better. I am not a gold bug, never have been (I am short gold right now, and on a tight leash). BUT, I have woken (waked up?) to the soverign solvency issue in the past couple of months. I think that the world believes there is no limit on currency printing. I know the politicians believe it because they have no plan B. There is a limit somewhere; I just don't know where it is or when it might possibly be hit.
We may ultimately have a common world currency. Right now the markets could dictate that currency to be gold until the world decides whose picture is going to be on the paper one. Gold is farily hard to print or manufacture out of electrons like T-Bills and people do trust it. I just don't know how to buy gasoline with it but I'm sure some enterprising soul will figure it out.
Today the world wants and needs dollars. Dollar-denomiated debt is being destroyed by default, payoff or foreclosure faster than the printing presses can run. This may be the reason the money supply is falling.
Martin, your thesis writing is getting much better. I am not a gold bug, never have been (I am short gold right now, and on a tight leash). BUT, I have woken (waked up?) to the soverign solvency issue in the past couple of months. I think that the world believes there is no limit on currency printing. I know the politicians believe it because they have no plan B. There is a limit somewhere; I just don't know where it is or when it might possibly be hit.
We may ultimately have a common world currency. Right now the markets could dictate that currency to be gold until the world decides whose picture is going to be on the paper one. Gold is farily hard to print or manufacture out of electrons like T-Bills and people do trust it. I just don't know how to buy gasoline with it but I'm sure some enterprising soul will figure it out.
Today the world wants and needs dollars. Dollar-denomiated debt is being destroyed by default, payoff or foreclosure faster than the printing presses can run. This may be the reason the money supply is falling.