Despite a significant widening in sovereign default swaps last week, the dollar remains in a downtrend, gold in an uptrend. Therefore, nothing has changed my year end positioning. I remain bullish on gold, silver, and select stocks.
I do not think that anything that is happening in Dubai will be the catalyst for a sudden spike higher in the dollar. If anything, it will cause a move back into the Yen (¥JPY) as the carry currency, as it is least likely we see a systemic devaluation in Japan.
Even better, it will increase demand for the ultimate flight to safety–gold. The move in gold is in it’s infancy. It must go higher. It can’t not.
It all started with Suzy Quatro. Though a Detroit native, she was a bigger hit in Europe. My cousins over there turned me on to her records. She later dated Fonzie on Happy Days. After Suzy, there were a chain of others including Joan Jett, Chrissie Hynde, and Sheila E. From the first tick of my clock, I’ve always dug chicks that rock.
Meanwhile, back at the factory, quite a few of you out there–that’s you my readership connection–have made it a point to let me know that many voices of the market are bearish on gold, including Robert Prechter of Elliott Wave Principle fame.
I’ve never met Robert personally, though I do remember when he won the US Trading championship in ‘84. I am unsure if he trades actively now. No matter–the point is that he and I have opposite opinions. He thinks precious metals are going to trade at lower prices and I think they are going to trade at much higher prices. Now that the opinions are out on the table, I am happy to report that my bankroll continues to be where my mouth is.
The precious metals–gold and silver–must go higher. They can’t not.
And the beat goes on.
Silver - Daily
In the modern world, silver bullion has the ISO currency code XAG. The name of the United Kingdom monetary unit “pound” (£) reflects the fact that it originally represented the value of one troy pound of sterling silver. In the 1800s, many nations, such as the United States and Great Britain, switched from silver to a gold standard of monetary value, then in the 20th century to fiat currency. -Wikipedia
Thursday, March 11, 2010 
