Reply #12: Goldbugs have been expecting this "correction". [View All]

[SlowDownFast]

I know I have.

It's possible it could dip as low as $850, though I doubt it will sink past $900 before bouncing.

I frequent some goldbug forums, and folks are "backing up their trucks" to buy this dip. I also frequent other economic forums who are anti-gold (deflationists), so I try to have a balanced outlook.

The fundamentals for owning gold and a gold price well above $1000 are sound.

Here's something to make you feel better (from Jim Sinclair's Mineset Blog):

Dear CIGAs,

Gold will trade at $1650.
The dollar will trade at USDX .5200.
You will benefit fully IF:

IF.....

IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:

http://www.kipling.org.uk/poems_if.htm

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Dear CIGAs,

The reason for today's drop in gold, among other reasons given by media, was the Federal Reserve’s mentioning of inflationary warnings. This is outrageous as the Federal Reserve opens the flood gates of monetary expansion by offering to make loans to investment banks, two of which took up the offer today.

Apparently the equity market has not taken the bait that was entirely set for the best interest equity market. This makes today a total flop for the stabilizers (manipulators). This makes me think that the giants of finance have run out of aces. This is certain when the famous names run to the Federal Reserve to shore up failing balance sheets and depleted liquidity.

Being in gold it is hard to see the forest through the trees. All you feel is a headache as the gold price takes on the volatility of a shooting star.

Sit back and look at the media blitz operation in the gold and energy market followed by a major flop in the equity markets. It appears that the old manipulation of perception has fallen flat on its ass for the first time in 27 years. The big name investment banks today ran to the Fed for money, exposing the lamest of excuses to show that it is not a stigma to scream to mommy the moment you are in trouble.

Gold is a small market and energy is even more so. The equity markets are huge and the dollar market is a giant. Energy and gold were down, the dollar was up against the euro but down against most other currencies in a mixed market, yet the stock market bombed out completely. That was clearly not the PPT and Fed's plan.

I have no doubt whatsoever that gold will trade to at least $1650.

Inflation is out of control because the growth of monetary stimulation has no sane limits.

Soon the US Federal Budget will also balloon out of control.

If you must trade gold, you have to travel light, using no margin and buying gold on days like this, but be willing to sell 1/3 on Rhino Horn days or US nights.

I bought today and have thrown bids in over the US night.

If you are scared to death of the gold price, do not have margin and are losing faith believe in me. I am here for you.

If you use margin you are on your own.

Regards,
Jim

http://www.jsmineset.com/

And here's a chart from today which clearly shows major support before $900: