At the risk of sounding like a Gold Bug we believe the price of Gold bottomed last week when it hit $3,963 mid-day on Wednesday the 24th.
And for those who keep waiting for a sign to get into gold (or get back into gold and mining stocks), the fact that it bounced back up to nearly $4,100 on Friday is a confirmation that you shouldn’t overlook.
Unfortunately, they don’t ring a bell at the top OR the bottom of any market.
But that’s what most investors feel they need in order to commit and/or get over their apprehension.
Therein lies the problem.
They want to invest and expect to hit home runs as opposed to hitting many singles and subsequently scoring many runs as opposed to a solo home run.
But regarding the price of gold, the summer months have historically been a cyclical period of pullbacks.
And this time is no different…but there was added pressure on gold over the last few months caused by the Iran war.
Which set in motion the dominoes falling resulting in a sovereign debt crisis in the middle east.
Huh?
Contrary to popular belief, the oil rich nations in the Middle East are highly leveraged and quite vulnerable to their debt.
And after Iran stated bombing the crap out of them (thanks to Netanyahu coercing America to bomb Iran) the big players in the Gulf States were rendered nearly helpless because:
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Their banking systems were out for over a week.
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They were all frozen from moving oil (their lifeblood) from one point to the other.
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They couldn’t service their debt.
Translation…A Major liquidity Crisis.
This forced them to sell an unusual amount of gold in order to stay afloat.
But you didn’t hear about it from the Presstitutes because a financial crisis rarely makes news unless contagion sets in and everyone starts scrambling for the exits.
All you saw was the price of gold tumble from over $5,500 to where it is today…$4,100.
And to confirm the numbers, that is a pullback of over 25% from gold’s high in late January early February.
Coincidence?
Naaaahhh!
It’s how the cycle works…especially when geopolitical events are involved.
BTW, a 25% pullback is a great indicator that something is oversold, unless the fundamentals have changed.
But the fundamentals on gold have not changed.
In fact, they are even stronger now as the so-called “Peace Deal” with Iran is toast.
And regardless of how much Trump blathers on about Iran, you should not expect peace anytime soon.
Got Gold?
Take this post as your sign.
Ding, Ding, Ding, Ding, Ding!
And learn what gold and silver stocks have the best upside (HERE).
Share this with a friend…especially if they’ve been thinking about buying gold for the last several years. They’ll thank YOU later.
