Update on Gold Today

5:30am CST

Yesterday I not only decided to eliminate my gold hedge, I actually decided to liquidate my brokerage holdings as well (PHYS is my holding of choice since I know the gold is actually there). Allow me to explain. This DOES NOT change my view of the secular bull market in gold and I do not recommend selling any physical holdings that I have advised. The fact is that I believe that the upside for gold is limited in the near term and carrying 30% of my portfolio in gold that was fully hedged just didn’t make sense. If the charts change and I am wrong I will be the first to admit it and will jump back in. For now I will be a spectator. I see big resistance at $1675-$1700 on gold and yesterday it hit $1667 so that is close enough. In addition, I want to see gold pick up relative strength again. Relative strength vs. other asset classes, particularly stocks before jumping back in.

Once again, this DOES NOT change my long term view and I would not sell any physical gold that I have advised buying to this point. This was simply a decision based on the size of my position and the fact that I just don’t see any big upside for gold in the near future. If I am wrong, I will jump back in on the long side.

I will show some charts later today explaining why I believe that the upside is limited near term.

 

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