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Tuesday, February 24, 2009

gold and silver : what happens now?

i'm anticipating a quick reversal in gold, esp. silver and a quick reversal in the market indexes.

GLD, if it were to go back, it will touch 91.89 and further down to 87.09, but not likely imo.  

Instead i think front month futures contract in $GOLD will get close to $1,100.  

anything can happen mind you, but this is my bias right now. 

Since gold/silver has dislocated not only from the equity markets but also from the $USD$ and commodities we will not see gold/silver behave as it once did from this point forward.  

Yes there will be corrections.  

YES, gold may go down to 87 area... but  

gold/silver will behave like its own currency (finally) because that is where "truth" exists relative to anything financial and furthermore gold has no counter party agent. 

This equation is not fundamental. It is more psychological imo.  

my last sentence should give a heads up, b/c if paper gold dislocates from physical gold from this point forward, then trading these "paper" assets won't be worth much either soon ( but holding physical gold will). I don't think we will be at that point until we have a paper gold "pop", if you will and that won't be until around $1,700/oz.  

i find it v interesting that www.usmint.gov will be using a sliding scale of gold prices soon. Their prices are about $300 higher than the spot price. good trading to all.
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