"All a bit crazy because if they stop the money printing, the POG will get creamed and if they continue the printing it still moves down. There is nothing rational about what's going on, which makes gold equities the most challenging equity sector right now"
I agree it seems that way lately but the long term chart is strong even with this 1.5 year consolidation that we are in.
The small pullback in gold last night followed a much larger bounce off the low.
We had 4 days of straight gains taking gold from its 1555 intraday low to 1613 close yesterday. It won’t keep going up without some pullbacks.
We already had a pullback in SLR, RRL yesterday and most others finished below their highs so last night’s pullback may have been anticipated and factored in already.
We will find out by the close whether the market anticipates the up move in gold to resume tonight.
I posted the following on another thread yesterday. The top chart shows what I mean when I talk about long term strength in gold.
Compare the current consolidation to what actually happens at the top of a bubble.
As I posted yesterday;
“I see a strong up trend with a correction that has been very minor relative to the up leg that preceded it.
I see that correction establishing itself as a trading range, not a down trend.
This is all bullish.
Bubbles end badly, quickly and aggressively.
I see none of this in gold.”
Bernanke has reaffirmed his commitment to driving the US dollar lower.
Most other Western govts have the same agenda.
That will drive gold higher regardless of any short term selling by some traders switching to equities at increasingly risky levels.
Its all about timing but gold has reacted well off support.
Short term still feels a little unpredictable but long term nothing has changed for gold.
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