The Demon Gold Bears Don’t See
Gold bears celebrated last week as the precious metals sector slipped. The SPDR Gold Trust (NYSE: GLD) dropped 3.3%; the iShares Silver Trust (NYSE: SLV) fell 3.1%; the Market Vectors Gold Miners (NYSE: GDX) collapsed 3.5%; the Direxion Daily Gold Miners Bull 3X Shares (Nasdaq: NUGT) cascaded 11.1%; and Goldcorp (NYSE: GG) fell 4.5%. I believe gold fell off while the SPDR S&P 500 (NYSE: SPY) climbed last week because elections in Ukraine went off without a hitch and Russia reportedly pulled its troops off the border with its neighbor. But what gold bears are missing here is that the demon, by his nature, will not go away; he will only alter his strategy and return in another way. Russia continues to foment discord within Eastern Ukraine. Rebels took over the airport in Donetsk just after the election. However, they were met by the first (informal) act of newly elected President Poroshenko. Ukrainian forces met with force the misinformed traitors in Donetsk who because of Russian propaganda believe themselves to be threatened by Kiev. Poroshenko has undertaken a fast-moving mission to crush criminal militias and reunite Ukraine. Who’s to say that will not take him to the border with Crimea, illegally taken by Russia just months ago. Russia is now poised to counter any new sanctions against it with a slew of actions of its own, which I believe will threaten the euro. Gold should recover lost ground. See our report on gold.
Labels: GLD, Global Affairs Geopolitics, Gold, Gold-2014
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