Why I Like DUST Long – 120811

In my last post I indicated I liked the ETF DUST long. Two days ago, we saw gold stocks and the XAU.X bounce higher. The candle on the XAU.X went slightly higher than Monday’s red candle. My guess is that it was a fake out candle, and we will continue the trend lower to 190 and probably 185.

As long as the talking heads continue to kick the can down the road, and not fix our economic problems, I’ll stay overall bullish on gold and silver.

Short-term however, I think they will take this lower, and pick up a few shares cheaper, before starting the next leg up. We’re coming into a yearly timeframe when China and India ramp up their purchases of gold. One way or the other, this coiling price action indicates a significant move is coming once it breaks out.