The weak hands are all flushed this month. Retail investors have either sold or shorted gold. Read this board, never seeing so many shorts. Big houses shorted at $1600 are covering now. News ,sentiments couldn't be more bearish. Just like it was bullish after Bernank announced unlimited QE3 and gold went down $500 thereafter. Jim Rogers said he will buy agressively at $1200. Its that time.
China launched two physical gold ETF this week. For the first time the Chinese will be able to buy gold at the touch of a button. Those two ETFs IPO aim to raise $800 million. That's 200 tons worth of gold. There are 120 million stock investors in China they all love gold. Potential buying could top 1200 tons this summer.
Love for gold is forever. Fiat money is just that. Milk was 5 cents a gallon. One day you can not buy a roll of tissue for $100. Fear is temporary driven by Wall Street 'pros'. 120 million Chinese will jump in as soon as they sense a bottom. Everyone is waiting for that trigger. First one in will be richly rewarded.
As I stated before. Maybe as little as a few positive word from Soros, Bernanke.... a Goldman Sach turn around, Rallies and corrections don't need reason , Goldman Sach and cohorts will provide it.
I have 20% of my net worth in gold. If gold goes down 50% from here. I stand to lose 10% my net worth. Only 10%. I 'm 60% cash now. 20% in my home. Gold goes down means dollar holding her value. If dollar doesn't hold her value gold goes up big time. I can live with it either way.
Time to turn off the computer go fishing.
I normally keep my investment in one sector under 10% of my portfolio. I never make exceptions since I lost half my wealth in the Nasdaq bubble. I'm ready to up to 15% this week and next. I believe gold still in a long term bull market. All the debt, deficit,war, unemployment around the world guarantees unending money printing. Higher rates could only mean calamity,deflation in equity, bonds, real estate. They will print even more money. Gold will shine in inflation, gold will shine in deflation.
Have the ETFs started buying gold ? Or they have to wait till the IPO process completes. I read somewhere around July 10th. 200 tons ? Gold ETFs lost 400 tons this quarter. With this much buying and short covering. I think gold recover to $1400~ $1500.
Everyone is watching waiting for a bottom. Once the Chinese are convinced bottom is in they will chase gold back up, like they chased everything else, stock ,real estate, milk, garlic, napa cabbage, pork, jade.......
Remember the Chinese are not allowed to short. They can only go long gold.
What will trigger the gold rush? Maybe a positive word from Soros, a benign statement from Bernanke, news China central bank bought more gold (I think they are doing it now and Korea, Russia, Turkey, Singapore, a host of Asian countries) .
This latest wave of selling came entirely from negative comments from the big houses and liquidity arising from bi annual bank reserve check in China. This ends last day in June. Friday is the last day of any forced selling. July is the start of buying season for gold historically.
Longs: I share your pain. You have held on for so long. This is no time to throw in the towel.