If only the market was so logical and sensible.....the problem that I see at the moment is that we have many traders and fund managers out there who have never had to endure bearish conditions.
Their reaction and behaviour over the oncoming weeks will be interesting to observe. A broker told me recently that the cfd market is driving approx 30% of the physical market...I find this difficult to believe, anyhow it will be interesting to see how the derivative markets hold up.
Maybe the boys at fat prohets will finally have prediction of gold rising beyond $1,000 come true.
My guess is that we will reach a point whereby someone of influence eg (president of Goldman or a citibank) declares that the recent subprime problem is a minor hiccup or an issue that requires 12 months to address. The market will then find its direction.
The interesting thing to watch as well is the reaction of the Chinese Govt and how they address its recent 67% increase in trade surplus. My guess is that the Chinese will at some point commence a large build up in Gold reserves as it won't have confidence in other currencies.
Buona Sera
SEN Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
