Jim Sinclair: If you are NOT buying gold at these prices, you have NO insurance for what is to come.
November 3rd, 2012
Gold Market Overview From An HFT Perspective
From Jim Sinclair:
China demand. The Chinese government has encouraged it citizens to buy gold. This is a saving culture with little faith in governments and currency. These avid savers have already bought large amounts of gold and will be buying more under the assumption that “If the price was good at $1750, then it’s great at $1700!” This is how value buying works.
Come Monday, Asian value buyers will be into the market. Some may want to try to get $1650 prices or wait until Tuesday to get a better price, but will quickly snap up gold as they see the price start to go up. These physical buyers will be buying on as the price starts to press $1700 for fear of missing this BREIF pullback in price.
CIGAs should also be value buying at these levels.
On Monday, shorts will try to breach $1678. They may get it to fall (briefly) but that level won’t hold. Spec shorts will be closing positions and adding longs at these prices. Spec shorts don’t want to get caught behind the wave of big money value buyers. High volume VALUE traders will be back into the market on Wednesday, after the election smoke clears. These traders will be snapping up every pullback of gold, knowing they can reap a big profit before the end of the year. This starts the gold run to $1800 (short term, ie Christmas) and $2000 close behind. $2000 is a low estimate with a looming fiscal cliff and rabid money printing.
It is an election week. All eyes (news coverage) will be on the election, with real news hidden in the folds. No matter who wins, nothing will change.
If Obama wins, Bernanke will continue QE as normal, secure in his job. If Romney wins, Bernanke will increase QE in an attempt to keep his job. Either way, the printing press rolls on devaluing in the dollar and increasing the book price of hard assets. Markets know this. Knowing something in a market is a strong motivator.
There is NO scenario short of an election coup d’état of congress that can stop the presses.
If you are NOT buying gold at these prices, you have NO insurance for what is to come.
If you are long physical gold, turn off the tape and come back to it on Thursday when this paper BS is over.