Currency wars detonate; Gold refuses to budge

Friday, August 28, 2015
By Paul Martin

The person who lives by hope will die by despair.
Italian Proverb

By: Sol Palha
Friday, 28 August 2015

Over the years we have frequently stated that every that every major bull market will experience at least one back breaking correction. Usually the correction culminates with a 50% pullback from the highs. In the case of Gold, this would equate to a pullback to $960. The precious metal’s sector had a splendid lope that began in 2003 and ended with spectacular dash in 2011. To think that the Gold bull would continue unabated would be to put it mildly wishful thinking. Sadly, many Gold bugs opted for this line of thought, rather than dealing with reality; the reality being that it was time for the entire sector to let out some steam.

Gold bugs have a dangerous knack for losing contact with reality and embracing the illusory. When Gold topped out in 2011 and started to correct, they started to recite “the buy on the dip” mantra. When it appeared to have put in a bottom in the middle of 2012, they became Euphoric and start to hum “death to the dollar”. However, this euphoria should have faded when Gold refused to trade to new highs, and instead put in a series of lower highs (look at chart below). A series of lower highs, after a very long run, is usually a negative omen. The Gold bugs were however unfazed and continued to sing “Kumbaya”, but alas no one was listening and the correction gathered steam.

The Rest…HERE

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