Gold Continues to Fail at $1400, No Momentum Allowed
On a day where FOMC chairman Ben Bernanke was testifying there was little hope that there would be any upside breakout to the price of gold.Â We had two other Fed governors come out to talk up and down the efficacy of quantitative easing and a continuation of mad hedge fund shorting at lower price levels even as the physical market continues to dry up.Â These funds are only interested in riding the trade to whatever end and refuse to consider the alternative, all believing themselves to be so much smarter than the next guy that they’ll know when to pick the bottom and get out unscathed.
Good luck with that.Â History is pretty clear and in the market the oldest adage is that pigs get slaughtered.Â And at this point, these momo monkeys are as fat as any lard hog the day before the auction.
For those holding physical metal, continue to do so. If you have spare funds that are clear of debt, add to your stash, gods know that the smart central banks are.Â But , until that occurs gold and silver will be at the mercy of whatever the Fed thinks it needs to do to promote the air of stability in a turbulent sea.Â In other words, buy stocks and go back to sleep.
These folks will not rest until the reputation of every gold bull is dragged through the mud and they have set themselves up to confiscate metal from defaulted exchanges vaults.
Tom is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.
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