Richard Russell – Gold is in the Process of Building a Bottom

With gold and silver off of the recent lows and the US Dollar staying below key support at 78.50, the Godfather of newsletter writers Richard Russell asked this important question,“Will the dollar continue its fall, and will the Dollar Index break below its March 2008 record low of 72.165?”

Russell continues:

“A typical know-nothing article appeared in Saturday’s Wall Street Journal. The title of the article was: “Is Gold’s Golden Era Over?” The article was accompanied by a chart which shows gold matched with the sluggish Consumer Price Index (CPI). The inference is that since the CPI has hardly budged over the years and gold has surged, that gold is in a fairy-land world of its own.

Of course, we know that the CPI is just another phony government index, an index that fails to reflect the true path of price inflation. The WSJ article tells us, “The price of gold largely reflects sentiment rather than fundamental demand, which is one reason why gold kept rising the past ten years. But speculators already have cut their bullish bets on gold to the lowest level since 2009. Heavier selling, in turn, could beget still more selling.”

This is the kind of utter nonsense we read in the media, week after week, month after month. Of course, ironically, the media is doing so-called “gold bugs” an enormous favor. The media has kept the US public out of, or afraid of, gold for years, thus holding back what otherwise might have been a panic by Americans to buy gold. In this way, the media has kept gold cheap, cheap enough so that the so-called gold bugs have been able to accumulate the yellow metal at bargain prices over the years.