I've been saying for years that we were going to start seeing $100 days in the gold market.I'm old enough to remember when this started occurring in the Dow. It is routine now, but it was a big deal at the time.
Well, here's what's happened so far: On Sunday night, we started the week with gold just over $1660 per ounce. As you've heard me say before, "That's a high price." Well, so is $1500, $1400, $1300, etc.
Except that in only slightly over 24 hours, gold had run as high as $1772.30. Granted, it took 31 hours to achieve this gain of approximately $110. However, gold appreciated at the rate of $3.55 per hour during this 31-hour period.
Jim Sinclair had been telling us to look for a $1764 gold price ($100 up from Sunday evening's start). So, hey, where we are now is pretty close. He'd been writing about $1650 gold for years. But $1764 - we had only five days to digest the transition.
The times they are a changing.Will we see volatility from here?
For sure. We're going to need more than 5 days to adjust to this surge. Movements of this kind are always associated with increased volatility.
Will Mr. Bernanke announce QE3 today?
I'd be surprised - among other things, each infusion of newly-printed money produces less effect - and we've already witnessed diminishing returns with QE1 and QE2. The bankers get the money, but they're fearful of loaning it, so they increase their reserves, and deposit it with the Fed for a hefty 0.25% annual return - better than loaning it in this dangerous environment!
So Mr. Bernanke may announce an end to the 0.25% rate - to discourage the banks from socking away their Monopoly money....
But watch Jackson Hole later this month!
Will we have more $100 days in gold this decade?My guess is - several per year - for the next decade. And a few years down the road - get ready for $100, $200 and $300 leaps. It's a process. But that is where we are headed.
This is the gold tsunami.
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