The Microcap Speculator

The reader reaction to my February 1, 2008 post on the faltering gold rally has been nothing short of staggering. Most of your emails (or comments left on the Seeking Alpha syndication) suggest that I have been “a victim of market manipulation”, “a sheep fooled into trading real value for fiat currency” or even “part of the cabal trying to bring down gold.”

That’s a pretty strong reaction to a simple post about the short-term price movement in gold — especially considering that since the post, April gold is down big — from around $930 to under $900. Silver is also down about 4%.

To those who cogently and calmly laid out the case for a further decline in fiat currency, or facts suggesting some degree of manipulation within metals markets, I greatly appreciate your emails and find much of your logic compelling. However, I can only trade prices, not logic. The 60-minute chart shows that the prices, for now, are moving south:

Major gold equities are not bucking the trend. If anything, they have performed worse than the underlying metal over the past few sessions:

Because of the technical picture, I am now fully out of the junior mining companies that have treated me so well over the years. As always, I will not hesitate to reenter if the trend reverses.

DISCLOSURE: No position in gold. Short ZIH08 silver futures.