Why I am still bullish on Gold?

I have given a lot of good reasons why I am still bullish on Gold.

I received lots of questions whether I am still bullish after the recent consolidation.

The answer is I am still bullish!

I believe the gold MAY go down another $50-$60 but when the uptrend returns, it is going to be parabolic. It could go up another $500. The reasons are complex but simple and succinct explanation is given by legendary fund manager in his recent presentations ( on slide 2 )are:

"
* Printing money will lead to paper currency depreciation
* Demand for gold as a reserve currency will increase
* Demand will overwhelm supply, causing price to rise sharply "


But that does not mean I am not hedging or protecting my portfolio of gold and gold stocks. I am current having short calls on all my long positions. If the price go up to my SC strike, I am fine as I will increased my profit. It is overshoot my strike and I believe the market is breaking up, I will roll the SC out and up or simply close it and take a small loss before adding short calls later when the stock reaches another level of resistance.

If gold falls below 1050 which is my support line, I will add protective puts to protective all my gold positions. It is small insurance to make sure that I keep the huge profits I have for this year. It does necessary mean I am bearish.

I am planning multiple scenarios and adjust as the opportunities present itself. It is important that I do not lock myself in a possible outcome although I believe the trend is up for gold. The market is never or always rational or logical.

If you think there are extreme emotions, there will be irrationality. To me, the point of irrationality for gold is still not present. I continue to see people getting out of gold at the slightest reasons and also, many of the smartest money managers and traders are still not going into gold. Thus, I maintain that the current leg up is still not a bubble or at a point of irrationality. This correction is healthy. Fundamentals are overwhelming to support gold. With the all the pressure building up on debts, loss of confidence in the paper currencies worldwide. and all the "energy" built up leading to the last run up for gold, I believe gold has some way to go on the upside.