June 11, 2006

Gold - nearing my kill zone.

Back on May 4th, I posted that I was dumping the rest of my Gold stocks and expected a 10 percent correction. Gold was at $680.

We are pretty much there. More to my surprise, many of the stocks are down 20-40 percent with the 10 percent drop in the metal.

That is very out of whack. The gold stocks should firm and/or we could see another $30-$40 drop in the metal itself.

With that in mind, I am bullish on gold stocks but won't likely add more stocks or the metal itself until we break $600. If we rally straight up from here, my buys the last week should do fine.

I would like to see another $30 break in the metal to build a big position.

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