So let's say that gold can climb another 5% to $1,150 before European and Japanese traders see it as a double top. That's why we went short on gold as very much ado was made about nothing when India purchased 200 tons of gold from the IMF this week. India is only buying at the "top" when priced in Dollars - as priced in Rupees, India is paying 20% less than they would have last year, when a dollar could buy you 39 Rupees (now 47).
Sadly Americans are fairly clueless about currency conversion and the gold bulls prey on that ignorance and put up all kinds of charts and draw trends and attempt to baffle you with statistics because they can be fairly confident that not for one moment are we going to step back and look at things from a global perspective. Oil is scammed in a similar fashion but, unlike oil - the gold market is heavily dependent on physical demand and they can only drive up the futures as long as they have fresh suckers to reel in but the price of gold collapses like quite the house of cards as soon as anyone tries to unload their shiny bits of metal.
...... The speculators need someone to take physical gold off the market, just like the Krugerrand craze that was used to drive up the price of gold. That's why India's purchase was such a relief and sent gold up 7.5% in the last 5 sessions - there had been a fear that the IMF would have to sell gold on the open market. China was originally targeted to be the gold buyer but the Yuan is pegged to the dollar and China had no interest in paying such a ridiculous price to store gold while India's currency is just rolling off their 2-year high and they are using gold to lock in their gains.
...there are NO fundamental supporting the price of oil, gold or any of the other racing commodities, this game is all about the weakness of the dollar and heaven help them if that play begins to unwind and they try to exchange their black goo and shiny bits of metal for a very scarce supply of dollars.
