Chinese gold buying will revive the gold price after the US elections next week notes Jim SinclairPosted on 03 November 2012 with 4 comments from readers
The gold market was hit by selling late last week but long-term holders of bullion should hold steady and not panic, according to the most successful trader from the 1970’s gold boom, jim Sinclair who now runs a junior exploration company in Tanzania and publishes a popular website. His website sees support for the gold price coming from China.
‘Come Monday, Asian value buyers will be into the market,’ says a post this weekend. ‘Some may want to try to get $1,650 prices or wait until Tuesday to get a better price, but will quickly snap up gold as they see the price start to go up. These physical buyers will be buying on as the price starts to press $1,700 for fear of missing this brief pullback in price.’
The writer explains: ‘The Chinese government has encouraged it citizens to buy gold. This is a saving culture with little faith in governments and currency. These avid savers have already bought large amounts of gold and will be buying more under the assumption that ‘If the price was good at $1,750, then it’s great at $1,700!’. This is how value buying works.’
Mr. Sinclair has already explained on this website that this is a buying opportunity and not a time to sell gold (click here).
The post today concludes: ‘It is an election week. All eyes (news coverage) will be on the election, with real news hidden in the folds. No matter who wins, nothing will change.
‘If Obama wins, Bernanke will continue QE as normal, secure in his job. If Romney wins, Bernanke will increase QE in an attempt to keep his job. Either way, the printing press rolls on devaluing in the dollar and increasing the book price of hard assets. Markets know this. Knowing something in a market is a strong motivator…
‘If you are long physical gold, turn off the tape and come back to it on Thursday…’