Gold: Maintaining Some Perspective

Yesterday was one of those days in the gold space that is a nightmare to many gold investors, but an absolute dream to investors like me. These are the days when the price action in gold resembles a cliff dive. Stop after stop gets hit as shorts press the issue and force overleveraged investors out of the market. Strong hands step in to support the market on its way to new highs.

The last time we saw a drop comparable to yesterday’s $40+ dollar move was in February. This was about the time gold bears reappeared out of hibernation to augur the end of the bull market. What happened next? A 3-month, $200 dollar rally. You can see why I love it whenever we get panic sell-offs that have bears celebrating.

For some perspective, I’ve pulled a 3 year chart of gold. Now unless I pull out a microscope, I don’t even notice yesterday’s sell-off that had investors running for the exits. This is the type of perspective investors in the gold space need to have. This is a very clean bull market.

Now I’m not saying we’ve hit a bottom and that we can’t break $1200 from here. But I can tell you that I will be buying every single time there is a panic sell-off;  I am more than happy to take speculative longs out of their positions. You are seeing right now that the markets never make it easy to profit. Those who are best able to keep their emotions in check will be the ones with the biggest profits.