Bernanke Speaks and Gold Soars

Gold bears better buck up and get used to this because the truth is that these may be the final days in which we ever see gold print with a 16 handle.  Since bouncing off support at $1631 on Thursday gold has moved $60 per ounce.  The fire was lit today as Ben Bernanke spoke leading everyone to believe that he was now going to print a whole ton of money, as opposed to what the Fed’s been doing for the past 4 years of course.  It’s good to know that the 2% rule is still in effect and after rising to an intra-day high of $1694, the breaks were applied with prejudice.

He made it abundantly clear that interest rates would remain at or near zero for as long as it took to finish destroying what was left of the middle class and retireees in the U.S.  get the economy running forward again.  By the time he’s done though, the Fed will own, at a blind guess, five to ten times more U.S. treasury debt than any other holder.  And unless the U.S. forcibly confiscates all of the sovereign gold held in trust by in New York the price of gold, necessarily, will rise to match M2 and settle this thing once and for all.

After three separate raids last month which could not break gold down to its 288 EMA on the daily chart the bulls have made their intentions clear: keep on attacking and we’ll sit here, like Jorge Pasada and play catch all day, except this catcher doesn’t throw the ball back to the pitcher.  He just keeps it.

Bernanke is eventually going to run out of balls to throw.  When he does I know I wouldn’t want to be short.

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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