Wednesday, March 27, 2013

Cramer: "Call Me a Gold Bug"

CNBC's Jim Cramer explains why he thinks gold is a "good bet," because of supply side concerns. By the way in the Cramer clip, there is a lot of talk about the recent decline in gold. The decline is no surprise to EPJ Daily Alert readers.  I wrote, for example, in the Alert on Januray 7, 2013:

 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:


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.

1 comment:

  1. Guy doesn't understand gold if he is looking at it from the supply side. What people holding gold are going to do with it is the key. There is still the question how bad the real economy is and to what degree that affects human action in the jewelry business.

    After that you got the paper issues too. You only own the gold you can feel in your hands. Banks, funds, and ETFs are not to be trusted. Heck you got to be careful playing the options market in order to get the best deal on physical gold...just ask Gerald Celente.

    Wenzel Understands all this, Cramer? highly doubt it