silverdoctors.com / By Stewart Thomson / March 13, 2013
Big bull market moves occur with enormous negative sentiment, and it is the liquidity flows of short covering that produce the most violent jumps in price, to the upside.
Those factors are in play now, but they would be “outrageously in play”, at $1400-$1450. Have no fear of a drop to that price area. I would not sell any holdings now, to avoid such a fall, even if I was 99% sure it would occur.
If the gold price fell to $1432, what would probably follow is a relentless rally, straight to the $2000 area.
1. Gold and silver stocks seem poised for a massive rally. I covered all my gold bullion short positions yesterday, and bought silver stocks.
2. Whether the recent lows represent the “ultimate bottom”, or there is a bit more downside to come, probably doesn’t matter.
3. Please click here now. You are viewing the daily gold chart, and a near-immediate move towards $1620-$1625, looksvery likely.
4. From a technical perspective, I would prefer to see gold decline to the $1400-$1450 area (roughly a 10% drop).
5. Many momentum-based trading funds would likely short gold if that happened, believing that major support had “broken”.
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