The technical situation of gold speaks volumes–AFTER a decade of uninterrupted gains…
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My theory is that the GLD etf (begun in 2004) helped to accelerate the gold run up as people piled on.
I believe it also drew investor money away from the mining stocks themselves.
When gold was trading in the mid ’90s at about $450 or so a stock like NEM was trading right at about its current price. NEM should have hit at least $100 by now.
Same goes for other gold stocks, except of course for HM,BMG,ECO,SSC, PDG,etc. (may they RIP).
The same thing will happen in reverse to the gold price when investors start fleeing the GLD.
The etf was a game changer.
Still remember when gold bottomed in the $280 area.
It was when the idiots at the Bank of England sold the last of it’s announced gold sale.
resting?
Paulson is not selling. The reason he has such a large allocation into all things gold, gold mining and precious metals is because he is predicting double digit inflation by 2012. He does not try to predict tops by simply looking at a chart, because that is stupid. He does real research.
http://www.goldalert.com/2011/01/gold-price-sinks-but-paulson-remains-a-gold-bull/
Paulson’s Gold Fund is the single largest shareholder of the SPDR Gold Trust (GLD), and holds large positions in a number of gold companies, including AngloGold Ashanti (AU) and Osisko Mining (OSK.TSX). In the firm’s year-end letter, Mr. Paulson wrote that “We are optimistic about Paulson Gold over the next five years and believe it is an ideal vehicle to hedge against the risk of U.S. dollar depreciation that could result from quantitative easing (QE).”
“JayPee” is a regular reader.
I just wish he’d stop calling me during market hours.
And Scott — that $1275 is my target as well.
We should only BE so lucky.
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Bill Fleckenstein on todays action:
Paging Dr. Schadenfreude
Away from stocks, the dollar and bonds were much weaker, while oil climbed $3. The metals continued their heavy ways from last week, with silver fractionally higher as gold lost 0.5%. Speaking of gold, it certainly seems to me that there are an awful lot of loud and vocal bears who are making a great big deal out of what has, thus far, been not much more than random noise. From its high, gold has declined about 7%, yet many folks are acting like it is the end of the world. We have seen all kinds of gold setbacks over the years, and a 5% to 10% drop over the course of a month is just what comes with the territory of almost any commodity (and, for that matter, stocks). Nonetheless, it does seem that the overwhelming multitude get a big kick out of seeing gold decline, as they absolutely seem to have a passionate hatred for it.
As for gold stocks, they continued to be roughed up last week, but in the last few sessions it seems like maybe they are trying to dig in. They bear close watching, as they may be able to rally aggressively once gold (finally) manages to stabilize and climb higher.