Sir Realist...
Most of the time, the commercials are right and the small guys are wrong. The commercials are building to the short side and we are headed into October, which is a seasonally weak month for the yellow stuff. The obvious move is to go with the big boys who know what they are doing and have a large influence on the market.
So what is an old geezer like me that has a substantial stake in gold stocks gonna do. I dunno, but my inclination is to continue to listen to my gut feeling and fade the pro's. I have plenty of padding in my positions to ride out another correction - even the most recent purchases are still in the green and the older positions are very green. With both our domestic financial system showing some cracks and plenty of larger cracks in South America and Japan, I think that as we near a showdown with Iraq gold will continue to work its way higher and a rogue wave of some kind could catch all those shorts in a very nasty position.
It would not surprise me to see gold drop another few dollars here, but if something unexpected were to happen somewhere in this old world the shorts are looking at a lot more risk than potential reward. We are living in a world which has never seen a higher probability for a rogue wave event to actually happen, so for now I will probably ride and see what happens.
As for the South Africans, there is more potential reward there than for the North American golds, due to their higher leverage to the price of gold (BTW, I only deal with unhedged golds). While you cannot always tell it by my actions, I am a conservative investor and decided some time ago that the risk in gold itself was enough for me without the added political risk that South Africa imposes. I sold out all of my South Africans a couple of rallies ago and put the money into mostly GG and GLG on the following pullback.
I make no recommendations in gold, just giving my opinion and part of the reasons behind it.
mlsoft
