Over the past few days, the financial world has been wrought with turmoil and turbulence. "Bleak Friday" (August 5) saw the S&P's downgrade of the U.S. long-term credit rating. Then, "Massacre Monday" (August 8) witnessed a 634-point crash in the DJIA -- stocks' worst trading day since the crash of 2008.
According to many of the mainstream experts, one safe haven from the chaos is gold.
"With turbulence in global markets... risk-shy investors flocked to gold as a safe haven investment. ...as long as there is uncertainty, gold will continue its upward climb. The sky's the limit." (Investors Chronicle)
In times like these -- when fear and panic reign supreme -- EWI's Metals Specialty Service editor Mike Drakulich offers this dose of reality:
"The key here is to keep as clear and unemotional thought process as possible."
Here's the one question cool heads are asking right now: Is gold's $100 rally over the past two days part of a sustainable "upward climb" -- or just a panic-driven blowoff?
Metals Specialty Service editor Mike Drakulich thinks he's found the answer. He reiterates it to his subscribers in the latest August 9 intraday update. You can read it in full inside the Service online now, but here's a quick quote:
"I mentioned yesterday that with GOLD's move above the upper channel line near 1690, a possible...wave extension might occur. That has happened, with prices now trading near 1740.
"Note that things are moving rapidly, and this an exceptional and dangerous environment... nothing would surprise me here. Expect extreme moves... This is where we could easily see a $75-100 range in gold, so extreme caution is warranted. Please be very careful."