-- Posted Thursday, 25 August 2011 | | Disqus
Rick’s Picks
Thursday, August 25, 2011
“Phenomenally accurate forecasts”
It seems like a terrible waste of energy to haul gold down by nearly $200, as has occurred this week, only to run it back up to new all-time highs next week. Or will it be different this time? Show of hands: How many of you think the POG will never, ever reach $2000 an ounce? That’s what we thought. Still, you can’t blame bulls for grumbling when DaBoyz decide to let the bottom drop out for a couple of days. And that’s exactly what they did, presumably because they had grown wary of chasing gold who-knows-how-high. And make no mistake, it is bulls who caused this week’s carnage, including the $112 selloff that occurred so swiftly yesterday. It’s not as though a bunch of sellers panicked and dashed for the exit all at once, trampling the strong hands who have sponsored gold’s rise from $250 an ounce. No, it was a case of buyers simply going AWOL – for just a short while, we are pretty confident. There was no conspiratorial meeting in a smoke-filled room to arrange all of this, just a tacit consensus that gold was ready for a breather before it launches its inevitable assault on $2000.
Yesterday’s “breather” should have scared the pants off speculators and investors who had grown complacent about the trend. But that is what bull markets are supposed to do: punish bulls and bears alike. Otherwise, it would be too easy for all of us to get rich. Thus do we see bursts of virile strength punctuated by devastating swoons. Losses are often recouped so quickly that even hard-core bulls are left in the dust, too bewildered and dazed to climb back aboard. And yet, more than anyone else, they understand that the monetary forces that have been pushing bullion relentlessly higher for more than a decade have not abated, not one bit. The story is the same: the central banks of Europe and the U.S. are in a last-ditch campaign to hold deflation at bay. Sure, they sometimes talk about austerity, and the bailout packages that some of Europe’s basket cases have signed onto are written in blood. But we shouldn’t kid ourselves that any of it will ever be paid back in hard cash. Nor does anyone actually believe that the 660 billion digital euros pledged against the inevitable crises in Spain and Italy will suffice to cover the approximately 850 billion euros those two countries will need to borrow in a year.
Bet against a renewed burst to $2000 an oz. if you want. As far as we’re concerned, though, it’s only the lunatic fringe that thinks the bull market in bullion is over. Meanwhile, if you want to closely follow our analysis, which is updated round-the-clock, consider taking a free trial subscription to Rick’s Picks. It will give you access not only to timely analysis and detailed trading recommendations, but to a 24/7 chat room that draws savvy traders from around the world.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indication of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2011, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Thursday, 25 August 2011 | Digg This Article
| Source: GoldSeek.com
