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Yesterday gold took a hit from roughly $1412 down to $1380 range…that was a drop of roughly $30 some odd dollars. I’ve been watching gold for a while, though I should have gotten long ago…I think there is still more upside for gold.

Despite all the hoopla about the U.S economy getting better in the news, I believe that the American government’s job reports, inflation reports and a bunch of others are all cooked. Skewed reports to make things better than they actually are driving the stock market higher to use the wealth effect to change peoples perception about the economy. You think things are better because the stock market is running higher and higher, but it is a house of cards.

Going into next year there is still a lot of headwinds like Euro debts, Inflation, rate hikes, devaluation of U.S dollar and municipal bond defaults as well as state pension defaults. A lot of the defaults have already begun in small towns…though you really have to dig to find articles on it. When these problems blows up then markets will take another big leg down.

In the short-term though I think there will be a small correction cause the stock market run up since Aug. 2010 until now can’t last forever without breaks. Then things might continue to go sideways until June and the second half of 2011 is going down and that is why I am buying these Claymore Gold Bullion ETFs on gold price dips.

by Das Brain

Please read my Disclaimer.

This entry was posted on Wednesday, January 5th, 2011 at 8:10 am and is filed under ETF, Economy, Money, Stock Trading, Technical Analysis, Trading Psychology. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.