As a gold trader, this post by Team MacroMan is near and dear to my heart (with nice charts that I can't figure out how to steal). I've been playing the slow summer sell-off for some time.
Of course, I could get my comeuppance if we get another large news event for a European sovereign debt fear. Something like Spain's cajas not being able to raise the necessary capital required by the EU stress test results (which are weak at best anyway) and then continuing to see their economy (20% of EU GDP) continue to decline amid ever-increasing unemployment (above 20%) and sky-rocketing savings rates (18.5% ).
That sort of event aside, I think it is entirely possible we could see sub $1000 prices per ounce over the coming months. I think the appropriate analogy is that of a bonfire (I would never dare to call it a bubble, right?), we need more buyers to keep this thing propped up. As physical demand (jewellery, etc) is hitting mulit-year lows and we're no longer getting the boost from new hedge fund investment (thanks John Paulson!), I think we're looking at a steady bleed down for awhile. There are many scenarios where I'm wrong, I'm just trying to flesh out the base case. Having to publish it publicly forces me to organize the thoughts better and if it benefits you? Well, then that much better!
BSY
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