Don't Believe the Gold Price

Is the bull market over for gold? Absolutely not, the linear trend line has not been broken on gold however, the parabolic trend line I am using has recently been challenged and briefly breached. However the shortages in the physical market tells me there is either soaring unexpected demand for physical gold (and silver) or a supply problem which leads me to believe the paper market is out of touch with reality.

A sharp correction in gold can lead to what many gold experts call a forced liquidation of the (highly leveraged) paper market. In my opinion there is no doubt the Gold Cartel gave it a little push on the down side.

This is yet another great time to dollar cost average:

Jim Sinclair reminds us why you don't speculate in Gold with leverage:

Chris W: You discussed the dangers of leverage in the precious metals markets while promoting cash investing, I want to give you a chance to talk about why.

JIM Sinclair: The majority of people couldn't stand what went on in the last month in gold, You know..they would see their life passing in front of their eyes, they would be terrified of their investments ...emotions would take them out where? Directly on the BOTTOM! -- UP it goes in they GO-- Before their finished they got no money so when you speak to many people you have a responsibility and the responsibility is sort of like don't yell fire in the theater. You don't have to have a ton of gold , A little goes a long way, Its an insurance policy.".... "GOLD IS INSURANCE when you start putting leverage on it you are a speculator...go speculate in GOOGLE, leave GOLD alone!"

Gold Price was the Alarm the middle Class needed.

I put myself in the same school of thought with the GATA camp.. The supression of the Gold price basically silenced the inflation alarm. If this alarm had went off earlier perhaps Billions in mal investments could have been averted.

You can thank Policy makers and Central banks for cutting the wires on the alarm system.