1. Goldman - sux is wrong.
Gold is NOT going back to 1040.
2. IMO gold has begun its second leg of the Bull Market.
Fundamentals.
The FED tried to suppress the gold price by hints that interest rates would be raised, maybe 3 times this year. By wiping out the hot money in the gold paper market, gold price was dropped a hundred dollars. The FED and the Obama regime was giving the rationale that the economy is now healthy enough that it can stand a raise in interest rates. However, when the May jobs numbers were put on parade we all saw that THE EMPEROR HAS NO CLOTHES. The economy has not recovered, interest rates will not be raised anytime soon. The gold market responded by a $30 raise in the gold price.
Silver and gold miners recaptured a good part of what they lost in the engineered, $100 gold price plunge.
FSM (a silver and gold miner) went from 5.40 to 6.22.
GPL tack on another gain.
THM, a poor gold play tacked on 20%.
The HUI gained 23%.
The investor public seems to believe that the second leg of the current portion of the Gold Bull Market has begun. I agree.
3. The changing paradigm of the gold market.
There is an excellent discussion of the gold fundamentals by Andrew McGuire:
China and India are the big players in accumulating gold. Russia is also in the game. The forecast is for an increasingly diminished role of the London Bouillon Market paper gold and an increase in the clout of China in setting the gold price. China has again urged its citizens to buy gold.
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