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Nothing Precious About The Gold Market, Feb. 2011
Many Gold Bug websites such as kitco and gold-eagle continue to push the throttle pumping out gold going to the moon articles. I would have to say a market that has been going up for about 10 years now and trading near record highs is a bad bet as a hedge or strait long play. Those adding over the past few months will be in for a long and painful ride. If the market begins to fall those traders will probably being saying buy the dips or chart support is at this level and that level. Next thing you know the price is below $800 and you still have idiots thinking the price will go to $2500 per ounce.
Bullish Thinking, Countries buying Gold etc... Those with large gold resv. either countries, banks, investors etc. are probably shorting 5 to 10 folds more then what they have. If you dont think banks and countries use leverage you need to wake up. This example is a great creative way to squeeze money out of nothing... Make huge money on the downside (while joe public bel. gold is going to the moon) and you still hold the underlying asset to hopefully appreciate again in a few decades.
Simple logic all the Gold ever mined has not spoiled sitting in a warehouse so the market has a continue more supply issue and on the demand side you have a created an economic question mark and gold is the safe haven..
Would not be surprised to see current stock index's and the not so precious Gold fall with it...
And one other note Silver is in the same boat. Five years from now gold investors will be looking back, What the hell was i thinking???