Quoted By GENE EPSTEIN in Barron’s
September 2, 2011
One such bear is Steve Briese, publisher of the Bullish Review of Commodity Insiders newsletter and Website. Having strongly recommended long positions in the metal early this year, Briese (pronounced “breezy”), recently put out a virtual S.O.S. to his subscribers. In the Aug. 15 issue of the newsletter, he called the daily gold price chart “as close to straight up as you can get without going vertical,” and then warned, in uncharacteristically emphatic language: “These charts always, always, always end with prices going down, down, down for a long, long, long time. Always.”
BASED ON EXTENSIVE research he did for Barron’s about the performance of similar roaring bull markets, which rose and then collapsed, Briese believes a 33% correction from recent highs, to about $1,250, is quite plausible.
Bolstering his conviction that the gold chart illustrates a classic speculative bubble, Briese further points out that the long side of the vast futures and options market has been in “weak hands.” Based on the Commodity Futures Trading Commission’s weekly “Commitments of Traders” report, he notes that the net short position of traders whose business involves dealing in actual gold has been at near-record levels over the past few weeks. In other words, the smart money, while not always right, has been voting with its dollars that gold will fall. It has mainly been the speculators who have been voting for a continued price rise.
But not wishing to overly bug the gold bugs, he recommends only that they consider taking profits and then wait to buy back eventually at what he believes will be much lower prices. This is a similar prediction to the one Briese made for commodity indexes in the March 31, 2008,Barron’s cover story. In that case, he was proved right by year end.
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