Big Mike's Contrarian Investing Blog

Gold and silver crashing: ouch!

Gold and silver move up to incredible highs, and then today someone suddenly let the air out of the ballon, especially the silver balloon. Ouch!

I'm sorry that I don't have any deep insights. According to MarketWatch, it's just profit taking which began in silver and then spread to gold:

"This originated in the silver pits," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.

There's "major profit-taking by funds that had loaded up ... in anticipation of the silver ETF [exchange-traded fund]," he said, and since the ETF still has not seen the light of day, "funds decided not to be pigs and took some money off the table."

This in turn started a pullback in gold, he explained. Traders are "much more inclined to take profits in the metal that had already had the largest percentage run up to the moment," he said.

Let's hope that the bloodletting only lasts one day.

Mahendra, you suck

In January I blogged about Mahendra's bearish forecast for gold, silver, and oil. As you know, Mahendra is an astrolger and prophet from Kenya who issues financial predictions.

Good thing I ignored his predictions, because gold and silver have risen substantially since January. Gold was below $550 the week of January 13th, and closed Friday at $587.80 . Silver was in the low $9 range that week and on Friday it closed at $12.05. Oil did go down a bit in February but it's back up to $67.43 for WTI on Friday. It certainly was nowhere close to Mahendra's predicted bottom of $44.80.

Interestingly, the link to the bearish prediction on his website no longer works. Hmmm.

It's a good thing I ignored Mahendra and held on to my oil and precious metals.

Ethical gold

I wrote about the ethical gold movement at my other blog.