|
Main Page
| Philosophy
| Current
Recommendations | Newsletter Archives
Contact Us
June 26, 2025
Gold’s same old
Story…
I wrote what
immediately follows here at the last major top (2012) in Gold…which became the high in Gold for the next 8 years. I’m not
re-posting it to say, “Hey! Look how right I was,” as I make no secret of
the fact that I can be just dead ass wrong in my recommendations as well. I’m repeating it here
because I view today’s Gold market, and all of the
“You GOTTA own it!” rhetoric, as being pretty much a word for word repeat
of the same Wall Street hype that was there in December, 2012, as Gold was
beginning a 40% FOUR YEAR DECLINE…
December 13, 2012
Precious Metals are
like the Dotcom’s of 2000
Be Short Gold
In my opinion, this
is where the real “Cliff” is…and $900-$1000 (or worse) Gold would not
surprise me at all.
To my ears,
believing in the ownership of Gold has become almost a speculative religion
today. There are ever so many reasons to buy it, own it, keep it…even
though its principal value is based on nothing more than the premise it
will either go up, or hold its value. Everybody is recommending it, from
PIMCO (Bond people!), to Soros, to Paulsen, to Deutsche Bank, Morgan
Stanley, Goldman…you name it, everybody is on it. And I do not use
“everybody” loosely…Check out these forecasts from various financial institutions
in the last few months…I swear, I have NEVER seen a market with opinion so
lopsided as it now is in Gold. NEVER. Not even close…
This is certainly
not everybody on the planet, but when you note the big names on this list,
and their bullish unanimity, you do have to ask: Who could possibly
be left to join this bandwagon? What NEW buying could possibly be out there
to push this market higher again?
And my answer is
NOBODY. In my mind, all you really have left is, you know who…the
PUBLIC…the fodder for all those houses listed above. If Gold does fall out
of bed, do you think ANY of these institutions will truly suffer from their
opinions? Sure, there might be this or that “rogue trader” who gets his
company in a pickle, but generally, the biggest losers will be individual
investors…the guys who are forever on the short end of the stick, the guys
who are influenced to make investing decisions based on the supposed market
“knowledge” of ALL those supposedly smart guys at those well-known banks
and brokerage houses, who are “logically”, confidently telling them,
“You gotta own some of this!”…And you KNOW
how this story always seems to end.
The Game hasn’t
changed. Even though Gold made its high over a year ago, Gold
ETF’s are now being owned in record numbers by the public…and
wrong though I may be…If ALL the Banks and Brokerage Houses, and ALL the
public buyers of those “easy to get in on this” ETF’s are right, and they
ALL make money, I will be dumbfounded.
I firmly believe,
ANY given day from here is where Gold begins one of its classic facerips….and faster than all this hoard of
nouveau commodity traders could ever imagine, it will have blown through
every “support” level any analyst wants to signify as “significant” on the
chart.
I mean really…Forget
all the “fundamental” reasons to own Gold. Look at the 35
year chart below…Does buying this here, especially when every “suit”
on the planet is telling you to do so, really look like a smart idea?
I hate writing at
length about any market…I know people just don’t want to read and read and
read some old hack’s two cent thoughts but I
suppose I have to at least briefly offer my own perspective on all these
wonderful reasons why Gold will keep going higher…
There are 3
traditional reasons to ever own this metal: Inflation fears, Geopolitical
Fears and the Failure of the World Economic System and its currencies as a
monetary vehicle…and I think none of them are valid.
Inflation? I’ve heard that argument for 30 years…every time
the Fed has been in an easing mode. They used to make a big hoorah about
how expanding “Money Supply” was certainly going to lead to
hyperinflation…which we never even came close to. Now it’s the QE programs,
that according to all sorts of sophisticated logic (again) can only be
inflationary. I’m not naïve, and I am being simplistic about this, and
recognize the numbers are bigger this time around (but they ALWAYS
are---just like you can’t buy a soft drink for a nickel anymore), but it’s
all still just Central Bank Easing…providing grease to the system in the
form of cheap money and liquidity…and WON’T lead to hyperinflation. Again, I have heard this “Hyper-Inflation is just
around the corner!” story forever…and even though there have been a few
blips along the way, the big bad wolf has never really appeared. Nice
economic theory but just textbook stuff, something else for everybody to
chatter about.
On this next chart,
check out the LACK of inflation in the CPI for the past 30 years, and maybe
you don’t remember it but I do…I can’t count the
occasions when almost every analyst in the world was warning about Fed
easing leading to inflation…And it just hasn’t happened…And won’t.
Geopolitical Fears? Look back up at that long term
chart…Gold went down from 1980 until 2000 and there were any number of
geopolitical “crises” during those two decades, none of which produced a
lasting bullish effect on the market. It was sideways to lower for TWENTY
years. To me, this says the whole “bullish geopolitical” argument is either
a myth, or at best, its effect is merely temporary.
The System
Collapsing and Gold becoming the New Currency? One, the system is NOT going
under and any discussion along these lines is ludicrous…And as for gold
being the New Currency, I am sure this may sound positively heretical
to anyone who truly “believes” in gold, but in this day of instantaneous
electronic billion dollar transfers, I think the idea of gold as some great
measure of wealth is nothing more than an antiquated perception that is
someday doomed to extinction. Yes, it’s a “rare” metal (not as abundant as
coal, for example), and yes, it makes for beautiful, everlasting jewelry
and trinkets, and yes, it is perceived as a repository of value…but to
suppose it is going to become the currency of the world is, I
believe, an absurd notion…I see Gold as still just another commodity on the
planet. We aren’t going to be lugging it around. And we aren’t going to be
swiping debit cards based on any of us having “x” ounces of gold stashed
away in some bank. It will always be worth more than many other commodities,
but it WILL always do what they all do…GO UP and GO DOWN. Be HOT and be
“NOT”.
IT’S JUST ANOTHER
COMMODITY.
I don’t care what
commodity you are talking about. Futures contracts almost ROUTINELY go
through 30-50% contractions. However much “logic” you want to throw at me
as to why “Gold can’t go down”, I will insist you are wrong…and I will also
insist there is a strong possibility it could lose easily lose 30-40% of
its value before we even halfway through 2013. Maybe I’m wrong…but I have
seen far too many supposedly bulletproof markets suddenly turn into Bonnie
and Clyde’s car when their jig was finally up. Gold CAN go down…and it can
go down a lot…and for many years to come..
I do think Gold today is very much like the NASDAQ of 2000…that
this story is old, old, old news. I hear talk of support at $1600, $1500,
or whatever number any analysts want to pick, and having probably done more
technical analysis than 99.9 % of the traders on this planet, I will tell
you that any talk of this or that level being significant is a bunch of
bunk. I have seen hundreds of markets, that, when the mob psychology switch
gets thrown, just go straight and
relentlessly down…And with long gold being one of the most popularly
widespread ideas I have ever seen, maybe I’m wrong but a relatively quick
trip to under $1000 would not surprise me in the least. How quickly? Who
knows? Maybe a year. Maybe three? But I think anyone who buys this commodity, and can only get a return on
their investment if it goes up….and then they sell it, if they take the
money….is going to end up living with a losing trade until the finally take
their loss somewhere further down the “yellow brick road”.
I REPEAT: I THINK
OWNING GOLD IS THE MOST POPULAR TRADE I HAVE EVER SEEN IN THIS BUSINESS.
AND POPULAR IDEAS CAN BE LIKE POISON IN THIS FUTURES TRADING.
And here is how it played
out from there…
And back to the present…
You’re kidding yourself if you look at today’s market
and think that, “It’s different this time.”
Again…IT’S JUST ANOTHER COMMODITY…WITH ITS PRICE ACTION DOMINATED BY MOB
OPINION MORE THAN ANYTHING ELSE…AND IT DOES GO BOTH UP…AND DOWN…AND QUITE OFTEN FOR YEARS AT A
TIME. FADE THE CROWD!!! ESPECIALLY ALL OF THE NEW YORKS SHILLS. BE SHORT
NOW.
As I’ve recently noted, IF
THE MIDDLE EAST BLOWING UP DIDN’T RALLY GOLD, WHAT IN THE HELL WILL?
And in this market? IF IT AIN’T GOING UP…THE
NEXT THING IT DOES IS GO DOWN.
I STILL MAINTAIN THAT EVERYBODY WHO WOULD BE LONG IS
ALREADY LONG THIS MARKET…NOT BECAUSE THEY NEED IT OR USE IT, BUT SIMPLY
BECAUSE THEY BELIEVE THE INTERNET YAKHEADS ON WALL STREET…AND SO YOU HAVE A
WHOLE MOB OF INVESTORS SITTING THERE LONG…AND WAITING FOR THE PROFITS TO
ROLL IN…WHEN, IN REALITY, THE NEXT THING WE’LL START SEEING IS THE USUAL
MASS LIQUIDATION SELLING AS GOLD SLIDES, THEN TRULY CRAPS OUT…SAME AS IT
DID BACK IN 2012.
Experience has taught me, that when it comes to Gold and
Silver, all ANYBODY ever thinks about is, “When do I buy it?” Knowing this,
I expect no takers here…other than myself…But will say it one more time in
hopes that some “fool” reading this might go along with me: GOLD AND SILVER
DO GO DOWN…AND WHEN THEY DO, IT’S USUALLY BIG, FAST AND
RELENTLESS.
Contact me if you’re interested.
Gracias,
Bill
770-425-7241
866-578-1001
All
option prices in this newsletter include all fees and commissions. All
charts, unless otherwise noted, are by Aspen Graphics and CRB.
FUTURES
TRADING IS NOT FOR EVERYONE. THE RISK OF LOSS IN TRADING CAN BE
SUBSTANTIAL. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE
FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS. THERE IS NO GUARANTEE YOUR TRADING EXPERIENCE
WILL BE SIMILAR TO PAST PERFORMANCE.
The author of this piece currently trades for his own
account and has a financial interest in the following derivative products
mentioned within: Gold, Silver
|