There might be some early weakness in gold ETFs as money moves from safety to equities, but when the price inflation comes roaring back, so will gold.On January 22, 2013, I wrote:
There may be some downward pressure on gold and silver as a flight from "safety" toward equities continues, which would make for an ideal buying opportunity of these stocks.On February 1, 2013, I wrote:
THE DECLINE IN GOLD SHOULD NOT COME AS A SURPRISE
As has been pointed out here at the ALERT, the climb in stock markets
is reversing a flight into gold. I have written about this for weeks.
It is a flight away from "safety," but it will be only short-term in
nature. Gold is, of course, the ultimate price inflation hedge and all
the global printing will eventually result in accelerating price
inflation and a flight back into gold.
The move back into gold will be very strong and you need to be holding
gold before the climb. Why do I say the upward move will be strong?
Because a lot of traders are positioning for a major downturn.
Money managers held a record number of bets on lower gold prices on
the main U.S. gold exchange, according to data released Friday by the
Commodity Futures Trading Commission.
Hedge funds and other investment managers tracked by the CFTC boosted
their bets on lower Comex-traded gold futures and options by 33%, to
65,617 contracts, during the week ended Tuesday. That is the most in
weekly CFTC data going back to June 2006.
These short-sellers will eventually get squeezed. Stay long gold and
silver and continue to accumulate on this downturn. The big play will
be on the upturn that follows.
The Cramer clip is here.