re: gold .... comment for 24/jan/2003
Dear Richard, I have read your article 'show me where the gold is accumulated' on 321gold.com with great interest as I always do with your writings. Being a goldmine trader myself for about 18 years now (mostly the South Africans) I feel I should explain how come the mines are behind the gold surge.
From the point of view of an investor these mines are at dangerous heights now ,which makes it easy for shorters to hold these stocks up ,compared to gold. There is a lot of volume but the shorts (here in Belgium a couple of big banks) think they still can manage to force it back down when overdone,as they were doing for the last 23 years. These gold bears are as confident now as were the investors in the year 1999. And I know from former bull periods that the mighty bull(= bullion)guys mostly like that kind of behaviour for it makes it more easy for them to crack their backs at way higher prices. I know that you as an experienced investor and chart reader,it doesn't take much imagination to see the 'pan and handle' configurations in a lot of charts and that the right hand extension has a long way to go from here. i.e. Echo Bay will reach its 5$ resistance in a whimp.
The action in the following weeks will be severe and historical volumes will occur in gold stocks cause nobody can stop the gold-train when she will be comin' round the mountain .There are few stations where she will stop from here.(That's how they gonna shake off Harry Schultz and his in and out traders) He who is not on the train will have to take a bike (old Flemish saying) I must say (although I 'm not a pro) that this gold ride is one off the most beautiful moves I have seen in the last decade, even experienced traders as George Slezak from the Goldbull- is still a Bear.
Why? -easy-. History says when the Commercials are shorting very huge, one has to do the same . What they all seem to forget is that once in a lifetime these guys use their shorts to support an imminent move to protect their cash market. They don't mind to have a little loss on the way up ,as they can sell the whole warehouse supply for multiples of 340 and 350 $. How about a big sale for 440$ and 460$ temporarily for making the carnage not too big. All the odds are on the bull side. The $ is suffering, the war is looming ,the markets are cracking...and don't forget that the South Africans are reporting by the end of February and the results will be smashing and the dividends could be tax free.
I advise you to take a look at the Brussels Continue Market. You will very often find gold stock on discount prices because the Belgian investor disgusts them for the moment.(from aug-sept 98 on I'm advising my friends to buy the big goldmines. Do you think even one of them made a big gain? No way sir. In spite of my close advice ,they all go in when I see an intermediate top and are scared to death when it comes down. This sector is no stuff for orphans and widows.
