fleck actually commented on it again tonight
fleckensteincapital.com 
On that score, I thought it might be worth making a couple points about yesterday's action in gold. Yesterday the gold ETF saw no liquidation. (We won't know until tonight what today's carnage yielded.) However, as I noted yesterday, the double-short ETF saw record volume (and the second-highest volume ever today). Thus, the price decline was precipitated by some combination of shortselling in the gold ETF (where the short interest has been rising quite aggressively), and or shortselling/liquidation of gold futures.
Potholes on the Gold Road
Those of us who believe that gold belongs in one's portfolio need to remember that the folks who don't like it really don't like it. After all, gold is easy to hate. It's just a price, and it appears to many that that price is too high. A lot of people want to see stocks go up, and many who do believe that a sinking gold price is a sign that stocks should go up, so they have a vested interest in rooting gold lower.
Mining stocks are even easier to hate because mining is a tough business and what they wind up with is gold, or silver, which as noted above, stock bulls and gold bears already hate. So it's pretty easy to see why there's quite a contingent that wants to bet against gold. However, those doing so have every government of the world fighting against them, in the form of printing money.
And, the physical market continues to show signs of people wanting to exchange their colored pieces of paper for gold. Interestingly, Brinks today said they'd been seeing "a large spike in clients shipping gold and silver from the exchange [the Comex] over the past few months."
Thus the battle continues. Folks need to be aware that gold will remain volatile. But I don't believe that the run in gold will be over without some sort of epic squeeze. Not that I wish bad things to happen to the gold bears. But let's face it. Gold has been rising for eight years, and that's what often happens in a bull market. |
