Monday, March 22, 2010

Gold Market Update: Time To Go To Cash!

Boy I hate being wrong!  For the last week, we've mentioned a number of companies in anticipation of "the new leg" launch upward.  Get your eggs and tomatoes ready if you plunged your hard-earned cash in.  Gulp!  I think it may be best to go to cash.  (Ducking!)

What changed?  Friday's action was horrible!  Monday morning's action, so far, has been horrible!  The Dollar, which looked cooked, now seems to have gotten a second wind.  Not that it's in great shape mind you.  The EURO and POUND are in WORSE shape!

So, what's spooking me?   Not the fundamentals, but the technicals.  If we were really ready to launch into a new bull run, the GOLD market would absolutely NOT have gotten smacked for $20 Friday and another $15 this morning as we went to print.

I learned the hard way that it's best NOT to fall in love with either a particular viewpoint nor a particular position.  I love the viewpoint that GOLD is going sky-high, but the evidence, AT THIS TIME, does not support that it's imminent.

Markets often telegraph as to what's coming, whether we listen or not is up to us.  The action of the last couple of days is suggesting that all is not right in the USA. 

U.S. Treasuries now yield MORE than Berkshire Hathaway, Proctor & Gamble, Johnson & Johnson and Lowe's corporate debt of the same maturity.  I believe this is unprecedented.

Banks are continuing to fail in near-record numbers.  Regulators on Friday shut down 7 more banks in 5 states, bringing the number to 37 so far this year.  This follows the 140 that were closed or sold last year.

Banks that are surviving, have tightened their lending standards.  U.S. bank lending last year posted its steepest drop since World War II, with the volume of loans falling $587.3 billion, or 7.5% from 2008, the FDIC reported recently.

These signs add credence to the notion that the "second dip" of the "Double-Dip Hyperinflationary Depression" is just around the corner.  Stocks are in trouble.  Gold is in trouble.  All financial assets and commodities are in trouble.

One key, if not THE key to surviving financial markets is being flexible.  Since no one has a crystal ball, it's vital to factor in new information as it comes and, if necessary, abandon old viewpoints in favor of new ones. 

Marko's Take?   Bad time to be stubborn.  Time to go to cash!   However, please be aware that this is a SHORT-TERM viewpoint only.  I maintain my LONG-TERM view that Gold will head to $5,000 per ounce.

If you want to castigate me for imploring a bum short-term investment in the Gold market, TAKE ME ON!

Marko's Take

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  1. Wow Marko ,
    Can't believe the 180 on your short term gold outlook .But I do agree with you, gold is looking kind of weak the last few days. I think a lot of has to do with options expiry on Friday .Every month at this time (expiry ) gold is taken down, you can set your watch to it, its the same each month . The dollar is sure bouncing around, up one day, down the next, the whole economy is in one big mess .I don't think anyone knows whats happening.You would think that gold would be flying high ,since all the conditions that favor gold are going on right now, I sure don't get it.Probably the safe place to be is on the sidelines until the dust settles.Also on Thursday is the CFTC hearings, give me a break, nothing will come out of them , that for sure. If the CFTC just did its job, and enforced the rules there would be no problem ,but they allow the bullion banks ( cartel) to break the rules every day.The whole system is corrupt, thats for sure.You know gold is always up after the comex closes, then in the A.M.when it opens down it goes ,same old story every day .I do think the physical demand for gold is so great ,and that will put these guys out of business and blow up the market. Demand is growing rapidly, particularly in Europe now where people fear an EU meltdown. golds day is coming, hopefully soon


  2. RD..

    Yeah, ya gotta separate short term which looks dicey vs long term which is super bullish.. I still think we hit $5000 but the next decent move is down not up..we'll see...yeah the CFTC hearing will be interesting..



Take me on!