George Soros Is Trying To Steal Your Gold
The Dynamic Wealth Report
February 17, 2010
by Justin Bennett, Editor
Remember the Austin Powers movie Goldmember from 2002?
Austin’s nemesis in the movie was a goofy character by the name of
Goldmember. His namesake came from the fact that he was enthralled by
gold. Everything he owned was made of gold.
He was so taken by gold he actually had his ‘you know what’ turned into
gold. It was a ridiculous movie and not incredibly funny. But it brings me
to my point.
Mankind’s love affair with gold isn’t going away…
Gold’s associated with the best and worst of humanity. For example, the
implied meaning of a gold wedding ring is everlasting love and devotion. That’s the best of humanity.
What about the worst?
How about the environmental degradation involved in mining it. But
that’s another story for another time…
Gold coins have been used as currency in days gone by. Nowadays, gold’s
not officially used as currency. But many investors still look to it as
the ultimate store of value.
Why? It’s painfully obvious that governments can’t control spending.
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They can’t seem to figure out you can’t spend more than you earn (in
the case of government, tax revenue). When you do, it creates problems. And with the recent financial turmoil, governments have printed massive
amounts of money out of thin air.
Each dollar printed makes each dollar already in circulation worth less
and less. This is effectively a hidden tax on the people. Each dollar
loses purchasing power over time. Hard earned dollars won’t buy as much
as they used to.
The price of gold skyrocketed at the end of 2009…
Traders and investors were clamoring for the yellow stuff as the value
of the U.S. Dollar fell. But recently, the price of gold has fallen
precipitously and the dollar is up from its lows.
Many say the bull market in gold is over. Even George Soros, the famed
international speculator, recently said gold is a bubble about to pop.
Well George, I’m onto your game…
George is trying to shake weak hands out of the market. He wants to
bring the price down. Rest assured, he’ll be waiting to scoop it up as
prices fall. (And guess what, that’s exactly what he did. Recent SEC
filings revealed he doubled his holdings in the SPDR Gold Trust ETF
(GLD) as of this morning.)
Fundamentals for gold are too strong for it to have already peaked.
I always say the charts never lie. You can see exactly what collective
market participants are doing by watching the price action.
And here’s the current technical picture for gold…
As you can see, gold is currently in a pullback. But more importantly,
it’s still in a long term uptrend. Notice the 200-day moving average,
which is trending higher (smooth grey line).
But here’s what’s really interesting…
In the midst of this pullback, gold is forming an interesting technical
pattern. Notice the green lines and how they’re converging. It looks to
me like gold is forming a large pennant pattern. Also notice how gold
broke above the
top trend line yesterday.
Judging by this pattern, gold may retest the highs from late 2009 by
mid-year (or sooner).
Is this a certainty?
Not quite… here’s my one caveat. As you know, stocks have been in
correction mode. The U.S. Dollar has been rallying due to debt problems
in Europe. If this continues, gold may come down to test the $1,000
level. So be sure to use stop losses to control your downside risk.
Obviously, there are lots of factors determining the future for gold. But the technical picture is looking pretty good for another run higher.
• Oil (Over $77 a barrel)
Fears over the building tensions with Iran and the U.S. Dollar easing
off its recent highs is putting a bid under oil prices. Crude futures
rose over 4% in heavy trading yesterday.
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