GOLD PLUNGE - WHAT WILL BE THE EXCUSE NOW THE DREAMLINER?
I guess I can't help picking on people when they write dumb things, I make fun of myself when I do so I think it is ok to do so. This is why people who don't trade should not write about trading. I don't play in the NBA so I don't write about it. I don't know why people get so clouded by these frenzies that repeat like an old movie over and over and over. In recent times it was the Internet was going to revolutionize the world, therefore you did not need any revenue or earnings to be a viable company.
Then it was they are not building any more land, therefore real estate has to keep sky rocketing. In recent years it has been the world is ending and precious metals are a store of value, therefore they have to sky rocket. There is heavy demand from China for jewelry ( my personal favorite ). Central banks are buying it for fear of a collapse. I think that covers the basics.
In these scenarios once the fraud becomes exposed the apologists now come out crying foul. With the Internet bust it was that we simple people just did not understand. The world was changing and being driven by tech and it was only going to accelerate. We did not have any vision. The use of the Internet was only going to increase ( they did get that part correct - even a blind sow finds an acorn once in a while ). With real estate it was all the banks fault ( something I am beginning to believe now, but it was certainly enabled by politics ). The gal who cuts my hair bought 3 houses in Texas as "an investment" ( my favorite line in this movie ). Needless to say she puked all 3 out for significant losses. Rent to own ratios did not matter ( they made me a million dollars so I would say they do ).
Now back to the future and it being Apples fault that Gold has gone down ( this might be the best one of them all, I have gotten many laughs out of that one ). Today Gold is having a down day thus far, will it be blamed on the Boeing Dreamliner problems? It is obviously the fault of something other than the fact that it is a commodity and they tend tend to go up and down.. Yes I said that, DOWN. A commodity can decline, it does not always have to rise. Open a chart book. You can see from the chart at the top that the reason for this decline is that there has been a ton of distribution recently and accumulation was light on the bounce off the lows. Distribution then picked up on the move down. Typically when you have this type of situation the market comes down. The exception would be the stock indexes which are essentially controlled by the government now, rules don't apply to them.
This is not a massive collapse by any stretch of the imagination, just a down day thus far. I don't death stare prices intraday so I don't know what is currently happening with this. The point I am making here is that don't get tied up in the BS stories that people write. I would rather listen to an explanation from a terrible trader, than listen to the whining from a fan on the sidelines getting paid by the word and not the dollars coming from their trading. I have not yet perused the web to see what people are saying about Gold today, but I will for a chuckle if it stays down.
The mid 1500 area is still the key area for Gold in my view. If we were to go down decidedly under that on a closing basis in the coming months, it could be lights out. As long as we hold above those levels, those who are bullish can buy the dips ( not me ). I would say at this juncture from a big picture view point I am neutral on Gold. I do think we ultimately will retrace most of the huge up move, but I don't know when that will happen. I do know that it is a commodity and they do mean revert over and over and this won't be any different in the end. I will continue to read the articles from the fans for entertainment value. I suggest when trading if you are easily influenced by the writings of others, not to read much. I am kind of head strong ( news bulletin there! ), so it does not influence me one way or the other. I do like reading the other side of the story in case I have missed something. It is one thing to have an opinion but do not let it effect your trading decisions unless your approach is based on your opinions. If it is you probably should think about a career change. A fool and his money are soon parted, but if you are a fool you will be behind the opinion based trader in the food stamp line.