Concerning the precious metals, we have reduced our exposure in gold… which had been at one time only three weeks ago one of the largest positions we had accumulated in many, many years… to minimal levels. We are down to what we refer to as an “insurance” position in gold and nothing more. This then brings us to the chart of spot gold in US dollar terms at the upper left of p.1 noting that gold has fallen to its 150 day moving average and it was there, back in spring of last year and again in the summer, that gold found strong
support. We noticed yesterday and the day before how many others were suddenly calling for gold to make its way down to $1270-$1290, our target to the downside all along. Two things then are likely to happen concerning gold: Firstly, it will not get to that level, thus
leaving those behind who wish to participate but only if that target zone is hit, or secondly, that target zone will be hit and the price of gold shall just keep right on plunging. From the action thus far today we think it shall be the former rather than the latter and we shall therefore raise our buying level from $1270-$1290 to $1295-$1305. If the margin clerks can mount one more assault upon their own clients, thus pressing gold down today, our propensity to act will be quite high. Indeed, we shall act if spot gold can put up a $1299 “tick”.
