Print 
PDF
Bookmark
Last week Marc Faber said that gold could correct to about $1,300 an ounce. He was probably thinking of months or weeks not a few days.
However, what comes down first will go back up first and the rebound in gold is likely to be beyond the wildest of expectations when it happens, maybe almost as fast as it went down. Markets are getting volatile, you may have noticed. Gold will rebound quickly.
Mini-crash
That can not be said of US stocks that lost two to three per cent yesterday, their biggest fall since last November. The big correction is here. How can that be if money if coming out of gold and into something that pays a dividend like stocks?
Clearly money is coming out of both asset classes. But make no mistake it is gold that you should be snapping up on this dip, not US stocks.
Just look at this S&P chart we have published before, the third wave is a very big drop indeed and has only just started (click here). Gold, on the other hand, looks to be almost fully corrected from its all-time high of $1,923 and is set for a huge bounce.
Is this like the nasty mid-70s correction in gold that fooled many into selling? After that sell-off the yellow metal went on to quadruple in price. That would take gold up to $5,000 an ounce.
No surprise there perhaps for the editor and publisher of this website who wrote a book predicting that price a few years ago (click here). Nothing has changed. Only the money printing has gotten far more out of hand.
Gold for profit
Where will the money go to after it has exited an overvalued stock market with no future? Bonds pay nothing and look perilously overdue for a correction themselves?
It still just has to be gold. The investment banks that shorted gold this week know that. Goldman Sachs will soon lead the buyers. Yes go for the gold man!
Gold has almost completed its down cycle. Everything else is on its way down, so gold is now the thing to buy.
