March 11, 2013
Weekly Market Outlook
By Keith Schneider
This week, thousands of sharks were seen off the Florida coast clearing the beaches. Additional caution was advised if one chose to brave the water while donning silver and gold. It seems those prehistoric creatures find gold bugs a tasty appetizer, mirroring recent market action. However, if it's equities you are wearing, it's perfectly safe. So come on in; the water is fine. The sharks are only circling the gold bugs and feeding off their siblings. John Paulson, a major holder in GLD, has been hit with liquidations in his hedge fund and has been forced into selling some of his hoard. After a major hit this year, the Gold market has been eerily quiet this week and was left languishing, despite the fireworks in the equities market. It's been hanging onto a major trend line which has been intact since 2010. With all the key US equity indexes at or near highs, it's not surprising that gold is also at a multi-year turning point. Friday's spectacular jobs data sent rates and stocks flying. We have been talking about a paradigm shift for a while and one can clearly see what is unfolding. The market loves the forced budget cuts and is ignoring higher rates as the economy improves. So much for the pundits that have been telling us how bad things are and the market is only up due to monetary factors. A few more sequesters and we might even balance the budget. To see the critical levels in these markets check out this week's video.
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