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So, now that everyone knows for a fact that gold is dead, I think this will be my last article on gold, as I am going to pack it in, and lock myself in my bunker in Maryland. In fact, my first phone call on Monday morning will be to my precious metals broker, as I will be selling ALL my gold before I lock the bunker door. And, yes, I will be selling everything, even if Mr. Gold himself - Jim Sinclair - calls a bottom in gold.. for the 124th time.

And, yes, I was chuckling the entire time that I wrote that first paragraph. I was chuckling almost as loudly as when I was reading all the articles that came out over the past week suggesting shorting gold at the current lows. Analysts and individual investors alike have almost officially given up all hope on the yellow metal. Worse yet, many analysts are suggesting shorting gold after this last decline, which is almost akin to willful misconduct by those analysts. In fact, if you are considering shorting gold right now, I think you would be better off just flushing your money down the toilet.

Yes, I know these are pretty strong words coming from someone who still believes that lower levels will be seen in gold, but I am also a realist who recognizes that gold will see a strong bounce over the next several weeks. While it is still possible that we can see another lower low after Friday's rally (taking GLD down to a double bottom or as low as 146), which is actually my preferred perspective, I believe we will see a rally over the next few weeks which takes GLD back to at least the 158 region.

But, along with all the entrenched bearishness in the market, we still have our foolish bulls pointing to the latest "fundamental-flavor-of-the-month" as to why gold is supposed to rally. If you can remember, we have been through the Fed's multiple QEs, evidence of inflation, European worries, Chinese and Indian demand, Central Bank buying, Cyprus, Japans easing measures, and, the latest one I heard is that gold is tied to the real estate market. Can anyone think of anything else?

Yes, many continually grasp for one reason or another to support their perspective that gold will rally. But, has any of it mattered? Have any of the commonly believed fundamental reasons caused the expected rally in gold? Well, we have our intellectually honest readers saying to themselves "absolutely not," while those that fool-heartedly cling to the old paradigms continue to walk around with blinders on, muttering "just wait, and you will see."

How many more times do you have to hear fundamentalist uber-bulls, like Sinclair, call yet another bottom before you realize that he has no clue about what really moves the metals? Ultimately, I am not sure who is worse - Dennis Gartman, whose opinion changes based upon the immediate direction of the metal, or Jim Sinclair, who simply says over and over "now THIS is the REAL bottom . . . and I mean it this time." In truth, watching analysts and authors attempting to discern the direction of gold has become nothing less than a comedy show.

Now, that does not mean that anyone can always be right about each and every twist and turn in gold. In fact, for those that read my article last weekend, my preferred scenario did not play out as expected, as we did not see a small rally before we came down to the levels we saw this past week. And, as some of you noted, I was truly unsure if we would see that rally before we saw this drop. But, I was quite clear that we would be heading lower under all circumstances.

So, for the next week or two, I am going to strongly suggest that you not maintain any shorts, as you will likely have your hat handed to you. While we may yet see one more decline in gold early in the week, we should see a rally that takes us to at least the 158 region. And, yes, I am still a bit uncertain if the 158/159 region will turn gold down towards our long time target region of 142/144, or if we are going to have to go much higher into the 170 region before we come down one more time to the 142/144 target region. Much will depend upon the manner in which we move up.

But, ultimately, I am still not totally convinced that we have seen the true bottom in the metals. While it is still possible that I am wrong, which is why I believe we are low enough to be suggesting to investors to be building a long term position in gold down in this region, I still believe that lower levels can be seen before the next parabolic rally takes us to new all-time highs.

Disclosure: I am long GLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Ding Dong, The Yellow Metal Is Dead!