After being bombarded all weekend with articles and notices from so-called experts and market-timers regarding the death knell of the 10-year old, secular bull market in gold, I thought I might attempt to provide some fortitude for you, my dear reader.
IGNORE THESE PEOPLE!!!
Three years ago this week, gold closed at $890/ounce. After trading to almost $1100 by March of 2008, gold was back down to $770 by November 2008. At this time last year, gold was trading around $1125.
Look at this chart:
Lots and lots of price corrections but never an end to the bull market. The action of last week is not the end, either. Have the fundos changed? Is the US suddenly solvent? Are states like CA, NY and IL suddenly solvent? Are all the various state and local pension funds suddenly solvent? Are buyers lined up out the door to participate in all future Treasury auctions and refundings, thereby eliminating the need for QE2 and QE3 and QE4?
Why is it that gold is the only bull market where every 2-4% correction brings out the top-callers? How many times did AAPL correct 2-4% in its run from $10 to $300? How many times did the Dow correct 2-4% in its run from 800 to 14,000?
Be at peace. Do not sell your gold, your silver or your mining shares. Do not trade front-month futures or options. This latest correction in price will only serve to contain gold and silver in a range, probably through Thanksgiving. As mentioned on Friday, let's look for maybe 1345 on the downside and 1390 on the upside until the next big move commences.