Well the cartel was back today to hammer gold and force it below trend line support. This will likely force the momentum and technical funds out of the gold market. Why is gold down today? It is not entirely clear--EUR/USD is relatively flat along with the stock market. The only explanation is that fears of a Euro collapse are dissipating with the release of the (bogus) bank stress tests. A large reason for the run-up in gold was because Europeans (particularly Germans) feared a dissolution of the EU and were buying gold to protect themselves. It seems the bank stress tests results along with the bailout package for Greece have temporarily eased concerns (long term is a different story). Other explanations suggest gold options expiration is to blame for the decline. But all is not lost, the long-term trend is still up as long as gold stays above $780. I am happy gold is declining in the short-term. It is always interesting to watch people get depressed when gold goes down when they should rejoice as they can now purchase gold at a lower price. Yet people never think of it that way. If you are interested in accumulating gold this is a good thing for you. Personally, I am looking for gold to fall to around $1050 before I buy any more. My goal is to have around 25% of my portfolio in gold bullion (right now I only have 5%). If the Fed keeps printing money that may eventually rise to 100%.
Black Swan Insights