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Jim Sinclair on the gold correction from $1,224

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The dollar has rallied today and accordingly gold is soft.

1. The temporary high of this rally was $1224.00 to $1224.10 in the cash market 3 times.

2. Remember the day that unemployment figures went from 9.5% to 9.4%? It was heralded as the end of the continuous increase in that figure.

3. Gold at these price levels will axiomatically become extremely violent.

4. The magnet underlying gold is at $1156 and below that at $1089.

5. Regarding articles that claim gold has topped, the Chinese will be buyers on the decline if they can make that purchase and save face.

6. This is a boon to the Chairman of the Federal Reserve as his supporters can claim that changing leadership when things are turning is a greater risk than maintaining the present leadership at the Fed.

7. If Bernanke is confirmed, which is reasonable to assume, you can be sure that the pressures for policy will be generated via the Treasury.

8. Clearly this economy is bouncing along a bottom and has decelerated its decline, but is doing so poorly in light of the over the top liquidity placed into the world economy. This is how all figures, market related, react in a trend. That is all.

9. Respectfully, this is gold so if you cannot stand the heat in the kitchen then you had better leave. Buying dollars here has no real fundamental basis other than a few days at best.

The MOPE ( Management of Perspective Economics) accelerated two trading days ago is now rising to spiritual levels. The exception to this is at the US Labor Department. They suffered a major loss of standing when they went wild over the drop from 9.5% to 9.4% as the end of increasing unemployment.

I am interested in following the analysis of this number by paying attention to http://www.shadowstats.com.

Gold weakness and dollar firmness is again temporary.

Act with your head, not with your gut center of emotions.

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Written by Peter Cooper

December 5, 2009 at 9:39 am

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