Gold ETFs Are a Gamble with Your Money

While the ETFs continue to show record investment demand for gold and while the demand for physical gold bullion remains unprecedented, the Comex continues its disconnection from reality in its price action.

As a long-time trader of decades experience, I continue to marvel at some the mainstream kewl commentators simply cannot seem to understand when it comes to why the prices in this market are acting the way they are. Yes, a $100 rally in gold is a sizable move up and can be expected to meet with profit-taking from short-term minded investors, but not in the face of continued record increases in gold ETF holdings and physical purchases. The charts tell us exactly where the line in the sand is being drawn by the monetary officials in an attempt to contain the yellow metal known as gold. After all, the monetary officials are invading into nearly everything that might negatively affect the stock markets buying up or bailing out anything that looks vulnerable, and we are somehow supposed to believe that they would not dare touch the gold market in an attempt to corral the one signal that nearly everyone including unsophisticated investors can read as an indictment of the health of the US economic system?

There are people out there who are so naïve they simply cannot conceive that this is a strong probability. He seemed to think it is impossible altogether. Let those in denial defend their ridiculous rationale for precluding such activity on the part of the federal government, in the face of obvious evidence. Their arguments would be predictable, such as that the government would not do such a thing because we can trust them. Not very convincing is it? In the meantime, the rest of us who do understand what is going on know very well that a total and fully-blown monetary crisis is already here and that causes the authorities to execute anything they could possibly concoct that they think will help the sinking ships they have decided to save, while letting the rest go out to sea. The end justifies the means to these authorities, and if that means sitting on the price of paper gold at the Comex then that is just what they will do.

Traditionally gold ETFs have been reliable but this is no longer the truth. Regardless, the activity has produced a technical chart level with resistance just over $900 level. This would need to be breached in order to start a solid uptrend in gold. There is a minor level of resistance shown in the charts, and support remains at about $870 for gold.