Gold in 2011 is what Oil was in 2008

It's not 2008 — NO — It's 2011-Oh-Eight. I borrowed this from M3 Financial Sense, which post I couldn't agree more with. Here's a quote:
However, the trades in equities are not the monsters of the era, those are the currency and debt trades and the commodity shorts. EURO, Dollar, Pound, Silver, Oil, Gold, Palladium, the softs and hards...it does not matter they are all destined for a major collapse. However, I expect this panic in the equity markets to trigger further distortions in these markets. Targets remain as I have said a few weeks back: EURO - 1.47 to 1.49 and Dollar Index - 71 to 69. The action, will not be orderly...and Eric Sprott, among many others, will be broke when the ashes are revealed.
Well, indeed, in my opinion, we are facing the perfect set up for a massive crash, and which asset is bubbling at the moment, and making all the headlines, making new all time highs everyday like oil did back in 2008 while the markets were imploding? It's gold.

So I believe gold is the last bastion of greed and speculation, like oil was, except that you cannot find any bear on gold, not even deflationist like Mish can think of gold going lower.

I think gold either has peaked, or will peak just shy of $2,000, the way oil peaked at $147 just shy of $150.

Now, the main issue is that IV is very very high, so shorting gold with put options is very expensive. I am now waiting for a nice set up to short it out-right buy going short GLD shares.


Anonymous said...

Did you miss your shorting opportunity?

pej said...

Though I'm not short yet, I am not sure neither about having missed the opportunity.

The market is often more forgiving than it looks like, and gives second changes :-)

With all those hyper-inflationists calling the decline a buying opportunity and the market expecting the Bernank to make a big announcement on Friday, who knows what will happen until end of next week?

pej said...

Gold is back at 1810 already. Just a few percent shy of its previous all time high. This reminds me of what Silver did earlier this year, before going really parabolic and then collapsing.

We'll have to follow this very closely, it will get interesting!

pej said...

Gold is now close to $1,880. Short opportunity spotted, I am still waiting though.

Tiho said...

Didn't Oil just crash straight down?

How come Gold is not going straight down? It was back at $1730 recently...

pej said...

We'll see. This is a tough forecast, as I wish gold would go up, and I really want to buy some. But we'll see, we're not done yet, the equity crash will come, and then then probably gold will crash as well.

Oil crashed in 2009, so according to my post, I believe a gold crash should be in the decks for 2012.