Gold: “You can cut the bearishness with a knife”

Posted by Peter Grandich -

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The time to take counsel of your fears is before you make an important battle decision. That’s the time to listen to every fear you can imagine! When you have collected all the facts and fears and made your decision, turn off all your fears and go ahead!

George S. Patton


“As the chart above shows, there is significant support for gold between $1,500 and $1,600 per ounce as investors step in to take advantage of lower gold prices.  More importantly, gold’s multi-year upward channel is still intact.” – Chart & Comment by Eric McWhinnie

Back in the spring of 2003 with gold nudging above $300 an ounce, yours truly turned bullish on gold after a 3+ year hiatus. While I thankfully sidestepped the few serious corrections in what I’ve called the “Mother” of all gold bull markets, I remained an ardent bull throughout (funny how the gold haters call anybody who’s been bullish and correct for a long-time a gold bug as if that’s to suggest we’re just crazy and can’t think straight).

My last cautious note was this past September when for one of those very brief moments we witnessed the gold bull boat get overloaded and was starting to sink. Because I believe gold is hated by the vast majority of people in the financial arena and the media that follows it, I don’t get swayed by their anti-gold tactic when the inevitable corrections hit – as it is now.

Dennis Gartman may have been the lightning rod this time around but the crowd and its methods are basically the same. What’s special this time is the bearish mood is verywidespread and has not only totally removed the euphoria that existed in September, but you can now cut the bearishness with a knife. Sentiment suggests much of the selling has already been done.

The current negative technical picture is what is helping drive the bearish calls and that won’t change overnight. At a bare minimum, it shall take weeks to repair the damage and its possible a further move lower of $100+ before a real intermediate to long-term bottom is in. But the key bullish fundamentals that I’ve constantly stated (and many of them are also noted in this article) remain firmly in place.

However, as George Patton suggested, I’ve collected all the facts and fears and made a decision – the “mother” of all gold bull markets won’t end until it’s at $2,000+