Comment: I know, I know

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Michael Nystrom's picture

I know, I know

Also with demand world wide going crazy and gold and silver being in short supply, how can price go down?

That's what they always say about everything, right before the crash. You do recognize that, don't you?

I'll tell you what I like about Jim Grant. Before he talks about gold, first Grant says, "I'm long gold, so take everything I say with a grain of salt." He knows that the simple act of being long distorts his judgement. But then he goes and outlines an extremely, rock solid, bull case for gold.

And in the long run, I agree. Don't get me wrong. Gold is money. Physical gold is wealth. Grant had a great interview on KWN a couple weeks back.

But in the short run, I'm just looking at the chart, that I've posted here many times, and it just doesn't look good at the moment. In fact it looks pretty terrible.

I'm trying not to get mesmerized, or fall under the spell of it just because it is gold. I'm just looking at a chart, and it doesn't look good.

I could go into all the "fundamental" reasons why I think gold is going to go down, including the fact that inflation is absent and interest rates are going up, but that would all be story.

In the end, I've learned that markets just do what they do because that is what they do. They don't care what story you make up about them. I've been burned too many times believing my own bullschnitzel. Who knows, maybe I'm telling myself a load of crap this time, too. But I'm both long and short at the same time, so I think that helps neutralize my bias one way or the other.

Today was key - everyone knew that, with the Fed and all. Tomorrow will be another key day, because the XAU is sitting on shelf support that marks about a 4-1/2 year low.

Gold is also sitting on support that marks about a two year low. These support shelves are key, because below them, it's a long way down.

So, we'll wait and see another day.

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.