Tuesday, February 05, 2008

Another dip, another buying opportunity

Since we last touched on gold, it had quite a ride. The GATA rally never materialized, and the pop we got from the Fed's 50 bps cut quickly fizzled away. Instead, we have an unpleasant "working-off" of the divergences I noted earlier.

With today's drop, sentiment surrounding precious metals is again reaching a low as judging by the internet traffic to three well known sites: Kitco, GoldSeek and Gold-Eagle.

Recent history suggests that dip buyers in the PM space will be rewarded, so I would reason that another opportunity is presenting itself if not already. For those of you with more doubt, I would urge a read of the most recent call transcript of Don Coxe for a refreshment of the macro trends in play.

PS I sold my SWC last Friday after another 20+% day. I was early which was fine with me.