Hi Joe, the drastic sell off can be explained by the threat...

Hi Joe,

the drastic sell off can be explained by the threat posed by commodity trading firm Glencore. What the Lehman Bros is to the housing sector Glencore is to the commodity's sector. The problem is that they leveraged themselves at the height of the commodity boom on the assumption that China would consume whatever was mined from the earth and pay a premium. The end result is that China is slowing fundamentally, despite technically perfect charts and commodities are being traded below the level required for Glencore to repay it's debts. It has 3Billion in cash and 30Billion in debts. This poses the threat of Glencore beig forced to liquidate it's assets to service their debt. And what a fire sale it would be. Who would buy in this climate? There would be no buyers and the sudden spike in supply of both commodities and their miners would cause further deflation of prices. This threatens miners, commodities and the bond market that was used to support them. The result is that the biggest commodity trading firm has lost 70% of it's value and investors are spooked. Afterall, when Lehman Bros collapsed it caused a domino effect.

After saying this, my personal opinion is that there is still considerable time before gold goes bull. So I will carry on saving and waiting for the right time to go all in.