Jubilee Prosperity

That the big smart insiders are currently short gold and silver was reported by our Big4 Weekly Asset Allocation Report.

GLD and IMF International Exchange Fund sold as much as 400 tonnes of physical gold to China, the Middle East and Russia, some of whom doubled their gold reserves and took physical delivery. When GLD sold like this last year, the price of gold fell.

Hedge fund manager John Paulson put 10% of his $6 Billion in Gold and gold stocks and ETFs including GLD. He plans to bring out his own gold fund in January 2010.

This may well put ebullient gold headline pictures on covers, the classic contrary sell signal. The call for auditing Fed, Fort Knox and Mint gold could crescendo around the same time.

What if the gold is really there? Or what if it isn’t? Is either inflationary?

Gold, which we bought since $255 in 1999, targeted $1005. It recently overran that target by 14% in this perfect Jubilee generation gold storm not seen since 1980. Some of us remember what happened after the 1980 gold peak.

http://stockcharts.com/charts/gallery.html?s=%24gold

These important questions remain:

Who is left with the cash to buy gold in size?

How can traders safely exit one of the smaller markets in the world when it turns?

Although we used Trailing Gold Stop Sells to protect precious metals positions, we recently begain to sell gold, silver and their derivatives to people who urgently demand gold at any price.

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This entry was posted on Thursday, November 19th, 2009 at 7:46 pm and is filed under Capital Preservation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.