Pessimism in the gold space

A number of investors have been hit pretty hard during the recent pull back in gold prices so we thought that we would begin with this missive from Jim Sinclair to add a bit of optimism and balance to the debate:

During reactions in gold, the degree of gold and gold share holders pessimism is EPIC and without cause.

Why Gold?

1. Gold is a currency.

2. Gold is competitive to paper currency.

3. Gold is not a commodity

4. Gold is a barometer of fear.

5. Gold is a barometer of confidence in government.

6. Gold is insurance.

7. Gold is insurance against government gone mad.

8. Insurance is not something you trade.

9. Gold is the financial high ground when global debt problems exist.

10. Gold in your hand eliminates all counter party risk.

11. Every single currency is paper backed by nothing.

Stay the course. Nothing is solved, nor will it be.

Gold will be violent. Gold is nowhere near fully priced.

Regards,

Jim

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Meanwhile over in the euro-zone Angel Merkel delivered a convincing vote as follows:

In Berlin yesterday, the lower house of parliament, voting 523 in favor and 85 against, approved giving the EFSF powers to buy bonds in secondary markets, enable bank recapitalization and offer precautionary credit lines. It raises Germany's guarantees to 211 billion euros from 123 billion euros.

Read more: 

As we understand it, by 2013 the EFSF will need about 1.5 Trillion euros as back up for the PIIGS, so the financial pressure on Germany to stump up is not going away just yet. It also looks to us that the politicians in Germany are not carrying out the wishes of the people, but we wont know for sure if this is the case until there is an election. The terms of the bailout for Greece are already causing demonstrations in the streets with the citizens burning Tax forms, etc. Its one thing to say that you will do something and another to turn around and say wont you, looking at the masses.

We also see that a banking transaction tax has been proposed by the European Union officialdom, as about 80% of these transactions take place in the city of London it is in effect a London tax. If this tax is imposed then the city of London will either sublet that element of their work to regional offices outwith the EU or relocate lock, stock and barrel. If they do decide to relocate then the EU will be collecting less in tax receipts than they are now. We will now see if the Prime Minister, David Cameron, can and will indeed stand up for British interests and veto this tax.

Either way we don’t see these dithers ever getting a grip as their concentration is focused on raising money and not reducing costs, something which comes to close to their bones.

We remain unmoved by the gyrations of these political rock stars and will continue to keep our faith with both gold and silver.

Regarding www.skoptionstrading.com. We currently have a number of open trades at the moment however, we do not update the charts until the trade is closed and the cash is back in our account. (During the carnage this week we closed one position for a profit of 62% and have updated the charts accordingly)

Our model portfolio is up 407.38% since inception

An annualized return of 113.83%%

Average return per trade of 42.43%

86 closed trades, 83 closed at a profit

Average trade open for 45.85 days

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

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