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|Subject: Re: Gold - Updated TA||Date: 5/15/2012 8:33 PM|
|Author: MDCigan||Number: 41068 of 41308|
I was surpised by this and you are indeed correct
...There's an element in India in the last several months which is very strongly saying we've got all this money tied up in gold which is not good for the economy. If we could just get the money into circulation instead of locked up on Indian wives or Indian vaults it would be good for the economy. And there's also a huge group saying that one of the big reasons we have this huge balance of trade deficit is because we buy all this gold and put it in the closet. Let's stop that. Now if they did that it would be devastating for gold. Gold would certainly go down 40% - 50% from its top.
This is consistent with the GMO white paper that indicated emerging market demand was a primary driver of gold prices.
In any case, I sold my remaining long-term gold position today. Feels weird after having held it for so long. Even if 1525-1535 holds as a triple bottom, I would expect a fairly lengthy bottoming and repair process where the trend following indicators turn before the price really moved up much. In the 2008 drop, the trendfollowing indicators basically got you out and back in at the same price, but you never know what that downside risk is.
Depending on how far gold drops, I think there could be some incredible bargains in the mining and junior mining sector in the next 12-18 months.
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