Giving Gold the Finger

I have more gold on one finger of my left hand than I do in my portfolio.

Monday Market Action

The recovery from Friday in the SP500 is continuing in an orderly, non-dramatic way, following a nicely-defined channel that will be highlighted the next time I post a chart.  The index rise accelerated a bit in late afternoon, and it closed at the top of the channel.  Not a lot to add to Friday's assessment until the down-trend continues.

The gold market is much more interesting, though.  Since topping at $1921.50 on September 6, gold appears to be in the early stages of a major level decline.  I see from the chart in my side bar that it has now dropped below $1600, and recovered a bit this afternoon.  That's a pretty dramatic 3 weeks.  Gold should continue to slide for several years before it bottoms out somewhere well south of $1000 per ounce.

 For more on gold, see StatsGuy and Karl Smith.

The problem with trying to figure a rational price for gold is that is has no intrinsic value - or, a least, none that makes sense in terms of pricing in a range approaching $2000.  So who do you think could be getting this right - a gray-haired old man with nothing to go on but skepticism, or world-famous veteran speculator Jeremy Granthom, who bases his reasoning on supply constraint?  Evidently he hasn't seen the links, above.