Thursday, September 24, 2009

In Case You're Wondering Why Gold Is Being Hit So Hard Today:

It's another obvious attempt to discredit the yellow dog as an omen of trouble and prop up the U.S. dollar, after the dollar almost fell off of a cliff yesterday:

PITTSBURGH, Pennsylvania (AFP) – The embattled US dollar is expected to come under scrutiny at a summit of developing and industrialized nations following China-led calls to review its role as a reserve currency."   Here's the link:   China Pushing To Replace the Dollar

Veteran traders and investors who have participated in the precious metals bull market over the last 8-10 yrs. should not be surprised by the action in the sector this week, as gold usually goes thru an ambushing ahead of big events like the G20 meeting.  We actually took the cash levels in our fund on Monday morning from 0% to over 20%, and have been actively hedging the downside with a short position in GDX.

Anyone with cash to deploy in the sector should be looking to put money to work during this pullback, as I can assure you that the big buyers in India and China will be buying physical gold with both hands while the fiat-fed lemmings in the U.S. and western Europe will once again have their physical holdings shaken loose by this overt market manipulation.