Quote:
The dramatic 2-3 day take down in Gold Spot pricing action smells and looks like capitulation to us at The Market Trend Forecast.Comment:
The markets can be very deceptive. Also, not for the faint of heart.
I memorized some of the market rules back in 1998 when I first began to trade. Despite these rules, I went on to make many mistakes that violated them. The goal of investing is to buy low and sell high. You're not going to be able to do that if you allow your emotions to rule your intellect.
One of those rules was to buy when there's blood running in the streets. An example with gold was when the gold rally began--gold was at a low of under $300 oz., and had been there for some time. Gold Bulls must have lost all hope when the rally began quietly.
Something fundamental has to be afoot before the market will really move. The fundamental thing changed in 2001 with the inauguration of George W. Bush. Bush's problem was political. He had inherited a stock market bubble which had just collapsed. Interest rates were still high and the economy was heading toward recession. Bush's response was the same approach that has been followed for the last 12 years and counting. That is, aggressive spending increases coupled with an expansionary monetary policy.
Nothing really changed when Obama became president. He has only doubled down on a policy that is failing.
The price of gold is being manipulated. It is the evidence of a failed policy that cannot be allowed to be seen. Hence the deception.
Another rule that I memorized is to buy when insiders are buying. Guess what central banks are doing? They are buying. They are buying while manipulating the prices down. What does that tell you? It should be telling you something if your mind is engaged and your emotions are well contained. Otherwise, you are hopelessly lost, and should not be in the markets and won't be for long.
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