Tuesday, August 2, 2011

Just a coincidence

Kim Yu-Na

10:39 pm (Hawaii) On Apr 29, spot gold made an all-time high at $1,565, breaking out after roughly three months of consolidation. Gold bears got their game on quickly and brought spot down to $1,473 by May 5, a drop of $92.

Fast-forward to July 12, and spot price rises to a new all-time high, then continues on. By Aug 2, spot gold is at $1,658, which is $93 above the previous high. So what does this mean? Maybe spot gold consolidates here between $1,565 and $1,658. Or maybe fundamentals are too different now compared to those in April, May and June. For goodness sakes, South Korea and Thailand are revving up their engines and buying up gold.

My hunch, based on all the mainstream media stories about gold's rise and the boost from central banks, is that regular peon folks (not just me and you) are going to attack gold like never before. It will feel like too many people understand the value of gold, if not the fundamentals behind real money and fiat currency. When that feeling strikes, maybe it's time to recognize that gold (and silver) are in a bubble that's about to burst. However, I don't think it will be that time just yet. People are aware, they're selling their scrap gold jewelry, etc for d0llars, but they aren't investing in bullion as a store of value en masse yet. Not even close.

Time is ticking away and the window of opportunity to secure physical metal at decent prices is closing soon. I'm not chasing tonight or tomorrow morning. I'll be patient, wait for a pullback and get more physical. Maybe I'll have a little extra fiat to buy with after trading paper silver and gold tomorrow. Or not. Getting into DGP has been wise, waiting for a move higher rather than flitting in and out like I have with AGQ recently. But if there is a pullback sooner rather than later, I'm fully prepared to add more ounces.

Odds that Comex raises margin requirements on gold are getting higher by the hour. Spot gold is at $1,668, off its earlier high of $1,674. Spot silver is at 41.00, off its earlier high of 41.51. No chasing. Just patience and watching for dips.

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