Perennial gold bull Citi analyst Tom Fitzpatrick reportedly told King World News this past week:
We see no reason why this gold trend cannot perform as well as the last bull market in gold between 1970 and 1980. The longer gold consolidates, the more we believe it sets up the platform, like 2006/2007, for the move higher. Certainly if we start to get a move up through $1,640 to $1,650, it looks to us like the upside move is finally starting, particularly if we can push through that $1,790 level.
When the move kicks in, we think it will be a very quick move to the topside....
Econintersect has published recently the reason we believe gold has been in the doldrums - a falling demand. However, this is a rear view look at gold dynamics. Trends in play (such as declining demand) remain in play until another dynamic intervenes. Gold bugs generally misinterpret economic data believing that a fiat currency has the same dynamics as a backed currency.
However, markets are not predictable - and two major players with generally good track records of making money (even though they have been unlucky with precious metals) are buying. Here an excerpt from Nigam Arora at Forbes.
On August 14th, I had just sent a bulletin out to subscribers stating that our rating for gold and silver for the short-term was neutral with a negative bias. The bulletin stated that subscribers who were bullion dealers may consider maintaining less than neutral inventory and less than normal long positions. Minutes later, 13Fs started hitting. The two that generated headlines in the media were from billionaire managers John Paulson and George Soros.
Paulson purchased 4.53 million shares of the SPDR Gold Trust (GLD). Paulson also added to his holdings of NovaGold Resources (NG), maintained his position in Barrick Gold (ABX) and reduced his holdings in Gold Fields (GFI).
Soros increased his position in GLD to 884,400 shares from 319,550 shares.
Read More on the lead Quote from King World News:
Today Tom Fitzpatrick told King World News, “We see no reason why this gold trend cannot perform as well as the last bull market in gold between 1970 and 1980.” Fitzpatrick also stated that a replication of that move, “... will take gold to $6,300.”
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