FinancialAdvisor's College Class (FACC)

[AnderL]

I thought you said this gold rally was suspect? A bull trap I think I remember. Even after the breakout from the 1 year triangle. No matter.

Gold is still only a small percentage of American investments and only after the break of $500 are most Americans considering jumping into gold. Gold is seasonal. A good buy in the Late Summer early Fall and a sell into Dec and Jan, like Oil is a good buy in late Winter Early Spring ahead of driving season.

I would also take heed with the notion that the Russian Central Bank is buying gold. That is like saying that the Saudis are buying oil on the open market... LOL!!! I've seen that post on articles on several occasions. Different authors but the exact same wordage. Someone is pumping... maybe Jim Rogers. LOL!!!

Russians are dumping gold. They have been told on many occassions that they hold excess reserves of gold. That is why they are dumping about 15 tons a quarter. The great thing about it is that they are not so much dumping as trading their gold for US Dollars.

So let us walk through the logic of it. The russians trade 15 tons of gold for US Dollars. They absorb US Dollars which generated demand for dollars providing lift for the US Index relative to all other currencies. That means other currencies fall to the dollar and causes gold to look more attactive to foreigners creating demand for Gold driving the price up creating demand for the Russian gold.

So we get rising gold, rising dollar, falling foreign currencies. Hmmm I wonder how those Europeans and Asians will feel when the dollar starts falling again after the rising rate and tightening cycle ends.