let me list the warnings i see:
1. silver has broken down badly from $50. it continues to this am.
2. silver stocks are in an obvious decline and got hit yesterday hard.
Silver is 50% investment (or more now) and 50% used by industry. There is less being mined than the year before. It is going down because of the demand from industry not from the demand of investments. Even if we enter another recession silver may go down to 25$ the lowest before taking off again.
3. gold stocks are no better. they usually lead.
4. we're at 11 yrs of the bull. some ppl say theres an extended 9 yr cycle going on.
During the crash of 2008 gold dropped from 1000$ to 800$ and has not looked back since. So with current prices and if we do have another recession then I would suspect another 20% drop being a great buying opportunity. (If you have the money for gold) Like you said in your other thread the Feds want gold to go down but they have the economy to deal with first and the economy (aka Wall Street) wants them to print more money which means gold will continue its climb.
5. asset classes don't all break down simultaneously. it took gold and miners several months to break down after the Dow in 2007 so i don't expect them to have followed the Dow down since May 2011.
6. gold is trying to or has, depending on how you look at it, entered a parabola. do you really want to buy a parabola now if we're entering a major deflationary phase when cash is King?
7. its debatable how widespread the evangelism about gold has spread but everywhere i turn, on street corner stores, tv ads, and my secretary everyone's buying gold.
I am not bullish on gold short term I suspect as I mentioned a 20% correction. I am very bullish on silver though.
ok, now for the tinfoil hat stuff. stop right here if you want to stick with the technical trading stuff above. over many years of trading i've learned to think like a criminal and this is what i see happening.
1. GS and JPM have huge short positions in the metals. do you think they will let them double, triple from here even if they represent hedges? i think thats the last thing they want to see.
2. gold has acted very strange the last coupla weeks to me ramping in the face of a severe selloff in the Dow and the clear threat of deflation.
Deflation to who? The economy has a whole? Remember these companies are sitting on MOUNTAINS of money. So many companies do not want to spend, this is why this illusionary deflation is happen when infact it will be inflation that smacks us in the face when all these companies open the faucet. Unlike the Fed companies do not close their faucet to control inflation. We got a taste of it already imo with the insane prices for these new ".com" companies (LinkedIn, Groupon etc)