Did gold go down, or did the dollar go up?
The only possible result it could have is in lowering the value of the dollar.
But because all of the geniuses out there guessed that the Fed was going to be even more stupid and drop the rate a whole point, now commodities are down and our future is secure!
Putting my money in a mattress is sounding better and better every day.
gold is down because we are in a slowdown. all commodities took a hit today.
And why is this portrayed as bad?
Yesterday, when the Dow, S&P and Nasdaq went up by almost 4%, the HUI was hammered for a 5% loss. This was the signal for a move on gold by the Fed and friends. At dinner with some of my rail colleagues last night, I explained what happened and said, "Tomorrow the PPT is going to hammer gold for $50 to show the world that everything is fine."
I was off by $10. It went down by $60.
Today the HUI dropped another 7%, which is about right for a 6% drop in gold, but I smell a rat. If I'm right, there will be more liquidation in gold tomorrow with another significant drop, perhaps in the $50-80 range.
As to whether this is just noise in a continuing bull market upleg or the beginning of a correction and long consolidation, I can't say. The latest upleg has been prodigious, so if the market consolidates, and then coils and twirls for a year before the next upleg, that's fine with me.
All things being equal, gold should find support around 900.
1500+ is still in the cards within 12 months, imho.
IT’S TIME TO BUY GOLD!!!!!
(And yes, I’ll shout the same thing tomorrow when gold goes up. I’m hoping for a career in radio advertising.)