Gold has experienced a healthy correction since it tagged $1800 recently, but it is really no big deal. As long as gold holds $1730, the outlook is bullish and it is OK to buy on corrections. I still see $2000 as a reasonable target heading into 2012.
You should be praying for corrections because they are the precursors to incredible rallies. The average gold bug in 2008 was rooting for gold to double to $2000 so they could make many multiples on their money and get out. Well be careful what you wish for, because if we hit $2000 in 2008, then the gold bull market would most likely be over. As it stands, we are setting up for a push to at least $3000.
Anyway, the other day I was bored so I read “Smart Money” Magazine. It was more for the comic relief than to pick up any pearls of wisdom. In one of the articles, a Harvard professor talked about how gold is a bubble and there is irrational exuberance surrounding the metal. I found this interesting. Europe is literally on the brink of collapsing, and gold is a bubble? Gold hasn’t even risen all that much since the beginning of the year, and it’s a bubble? No wonder most people don’t have a clue as investors- these are the kind of people teaching them.
If gold is a bubble, then why does the price action in gold resemble no bubble in history? No one can answer this question. All the gold permabears are still in hiding, no doubt waiting for a correction in gold so they can announce to the world “I told you so”! Meanwhile, gold bugs like myself are profiting.
Anyway, just wanted to make an announcement. It’s getting a little harder for me to update every day, but I still want to write occasionally. I was thinking about creating a private newsletter (for a reasonable monthly fee) with more specific advice, charts, etc., but without daily updates. Not sure if people would be interested in this, but please shoot me an email at firstname.lastname@example.org if you are. Otherwise, I probably will wind down the blog as I focus on my personal business/investments. But thanks everyone for reading and the support. It was really fun getting to know you all and I’m glad to know there are sane people out there =). And know that you can always email me with questions, comments, etc.