Strap in, this one is going to be a classic......

Gold, having been screwed yet again, bounced off of $952 in Asia, where is got flattened coming into Euorope. When the Crimex opened, gold was up a couple of bucks when all of a sudden it was decided by Treasury's undersecretary for international affairs, David McCormick, that Congress would be open for the IMF to sell some of it's gold. Well before you could say "crock of shit" gold was off $10. (The second I saw that headline, I dumped all my gold stocks except for NSU, and went short a boat load of GDX).

On how many levels is this a farcical attempt to cap gold? First, any large seller of any security in the world would not make his intention known. Why suppress the price? Second, does anyone who knows even a little about gold, really think the IMF gold is going to hit the market as I am sure China, Russia, and all the Middle Eastern CB's are drooling over buying this gold. Third, how desperate are they getting?

This is clearly meant to put a cap on gold and in my opinion they have succeeded. I think gold will be dead money until the sales are cleared up (barring anything extremely disastrous happening---like the dollar breaking 74). I think anytime gold even thinks about lifting, you will see a well planted story about the upcoming sales.

Like I said, this would be hilarious if it didn't prevent the gold bugs from making money. Gold is the only commodity in the world that has to go through this shit. And even though I made money in the gold arena today, it is not the way I like to do so. I hate making money from the short side, I much prefer to be long as I believe that is the correct direction in which gold should be travelling. In a few years, when the USA is on the mend, and there won't be a need for gold, then I plan on making money from the short side. But not now.

There have been many days that stand out in my memory where the gold bugs have been absolutely fucked. First and foremost is the day about a year ago, where China raised rates and gold was down $2 in the Crimex session only to fall $25 in 7 minutes in the electronic session. Second, are the jobs Friday where the news is absolutely terrible and gold goes down when the dollar reverses. I think today (actually since the IMF announced the sales) comes in third.

I will say, the fact that gold was only down $6 and HUI up $2 is a good sign. Normally, you would expect gold to have been down $20 and the HUI down 25, at least. (I had covered my GDX short for a nice profit, and was only long NSU. At the close I bot a little GOLD as that is normally up in the mornings, no matter what gold is doing--it's a trading position).

Look, I know the IMF gold sales are long term bullish, and they are morons and always sell right before a huge spike higher, or at the start of a bull market. I just hate getting robbed like this. Keep in mind, I own a lot of bullion and my retirement accounts are loaded with gold stocks as I don't trade those accounts. Those accounts get hurt. And do I mention that gold and the stocks missed out on yet another stock market rally today?

The fundamentals are so perfect for gold and getting better every day. Food prices are skyrocketing, growth is slowing, and most importantly more and more currency is being created every day. On one hand, the CB's of the world create this mess and on the other hand, they prevent the one security that should be benefiting from this mess. As usual, all roads point to gold, no matter how many road blocks they throw up.

On a side not, how many folks are schlepping up to Toronto to hear Sinclair speak? I would love to go, I just wish he gave more advance notice as airfare is an arm an a leg. If you are going, let me know.