If you're a gold bug, this Financial Times article (Hedge funds turn to gold) will be a sweet melody that will send your ear drums straight to heaven. If you're a gold hater, have acted on your hatred and feel vindicated by gold's recent swoon, keep your stops close and consider taking partial profits.
“The size of the Fed’s balance sheet is exploding and the currency is being debased. Our guess is that if the chairman of the Fed is determined to debase the currency, he will succeed,” Mr Einhorn [founder of hedge fund Greenlight Capital] wrote in a recent letter to his investors. “Our instinct is that gold will do well either way: deflation will lead to further steps to debase the currency, while inflation speaks for itself.”
Mr Einhorn’s comments – and the revelation he is buying gold itself – are in line with the views held by other large institutional investors in Europe, according to bankers in London. The head of commodity sales at one major bullion bank told the Financial Times that he had never been so busy dealing in gold for large investors in his life.
2 comments:
IMO, Gold is heading to 700.
If we break through the 50 and 200 day moving averages (currently at around 900 and 850 respectively) I can see a situation where we have a 700-1000 trading range lasting a while.
I don't see it falling below 700 though. Should the global economy keep falling to pieces over the next few years, gold should be comfortably and durably above 1000.
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