You have heard the term, Waiting for the other shoe to drop, in the US S&P down-grade of out credit to AA is that other shoe. It hit the stock market with a thud heard round the world. Yesterday Wall Street took a 634 point drop almost a 6% drop across the board. Today there seems to be a rally of sorts. Yet, the Dow is down over 1000 points in 5 trading days.
This is just the beginning of the knee jerk reaction to the Down-grade. Gold is making a run towards $1800 and should settle well above that total in the ext 60 days. One thing to note is a potential of raising the margins on gold. Should this take place you will see a retraction in gold similar to the one in silver back in May when silver margins were raised.
On a final note silver is moving contrary to the rest of the metals markets. This might be a leading indicator of a coming retraction for gold. We would like to leave you with some advice from Jim Rogers, I own gold, I’m worried about gold, it’s going so up so much, I’m not going to sell it but it looks like it’s setting itself up for a nice correction. I hope so then I can buy more.