-- Published: Monday, 10 August 2015 | Print | Disqus
By Peter Cooper
Gold prices jumped over the $1,100 hurdle easily today as the precious metal seemed to join in the rally with Chinese equities, and shorts were reminded that they can always get caught out when the latest sure-thing goes pear-shaped.
We’ve been warning for days that gold was looking particularly oversold. Our editor Peter Cooper penned a lonely, brave article last weekend in The National (click here) calling the market bottom.
It is in the nature of short covering that large short positions tend to produce spectacular reversals because they can only be cancelled by going long and buying the metal.
How long will this one last? A few minutes or months? Hard to say except that gold price bottoms in August are a classic pattern followed by better months in the autumn as the Indian religious festival season kicks into top gear.
What if gold suddenly became everybody’s favorite hedge against deflation this fall? In a deflationary period you want to choose a rare asset whose price is still going up or falling by less than everything else.
Martin Armstrong predicted this would happen for gold way back in 2009 (click here) and if his six-year old prognosis is still correct then $5,000-plus gold will be with us next year.
Gold price bottom
He also called the bottom for the gold price correctly this summer, albeit we still have some readers who disagree with our interpretation of his work.
Could the goldbugs now emerge from a lousy summer into a much brighter autumn? Maybe this time gold and silver will shine when the US stock market finally takes a plunge.
Dr. Armstrong has long pointed to the end of September or beginning of October as a crucial moment for global financial markets. That need not necessarily be a bad thing for gold if it becomes the hedge of choice against another crash.
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-- Published: Monday, 10 August 2015 | E-Mail | Print | Source: GoldSeek.com