I post this only because Buddha asked me to. I am not an "advocate" of gold, an apocalyptic raver, a blogger, a web-analyst chumming for business, or a broker. I am a speculator. I make money trading the short-term (and cyclical) waves that map out long-term trends. I pay attention to macro-economic "fundamentals," as they are narrated by the popular press, but only for the purpose of gauging sentiment for the contrarian plays. Most of my work is technical (trending metrics). I pay attention to what the markets are REALLY doing (price) versus what media pundits say they OUGHT to be doing. Usually, at important turning points, the media are wrong (who wants to risk embarrassment making an unpopular call?). I pay particular attention to MACD and RSI indicators, looking for divergences against price. I watch pattern interpretations, but patterns morph with price, and their interpretations are too often aligned with what the crowd sees. And I want to go against the crowd.
Macro-fundamentals for the sector are bullish, long term. Markets trend in secular up AND down trends for macro-reasons. Long term, the $USD is being pimped lower, no matter WHAT the political mouthpieces spew forth. We owe too much on our trade balances, and a weaker $USD is the answer to the short-term fix. It won't work, but that is another story, and I don't have the time to tell it.
As I posted a few days ago, when the geek parade was piling into a tradable top on OBVIOUS news (i.e., the $USD is no longer a reserve currency, the Chinese and Arabs want a change, etc., etc., etc.), I thought we were approaching a short-term top.
Today, we confirmed that top. But the fundamentals are still intact, and December, EVERY year, since this secular bull market in gold began in 1999-2001, has been a climactic month in the seasonal cycles of gold.
October has been weak, after usual September rallies.
We are now on cycle. We are now entering the buy zone. My favorite 3 three mining companies are GG, AUY, and NXG. Buy low, sell high. If you don't buy low, then you have nothing to sell high. Duh. Sentiment has turned negative on gold because prices are falling. There is a gap on the COMEX December Contract chart waiting to be filled at around 1018. It may or may not fill. More importantly, my favorite miners (above) are now humping down into STRONG support. I sold GG at 43. I bought it back today at 38.18. I almost bought back the AUY I sold at 12.52 today, when it printed 11.30. Still, it has a gap down to 10.70. I will almost certainly buy tomorrow. There are no gaps on the NXG price chart. It closed today at 2.72. You might get 2.50, but if it prints ANYWHERE in the 2.60's, you should buy anyway. The upside target for NXG is 3.50-ish. AUY has been to 21. GG has been to over 50.
Repeat. You cannot play unless you are willing to buy wash-out selloffs. Wash-out selloffs are confirmed by negative press. We are now getting negative press, due to a (temporary) bounce in the $USD, AND due to recent, er, overenthusiasm concerning the gold sector. And, of course, due to cyclical pressures.
Okay. I have done my duty. Buy low, sell high. Now is low, high comes later.
Keep your positions small, and sleep well. Go large and squirm and sweat all night. This is volatile shit. ANYTHING that allows you to potentially double your money ALSO allows you to halve it. That is why you have to be a contrarian and buy when others are selling.
Happy tunes, all.