This gold price correction is normal and healthy, says the DNA of volatility

Seeking Alpha/Frank Holmes

“I’ve already seen numerous headlines questioning whether this is the end of the gold rally. Hardly. Corrections such as this are normal and healthy. They’re a part of gold’s DNA of volatility. During the monster rally of the 2000s that culminated in gold hitting its previous record high of $1,900, there were several significant pullbacks, some of them exceeding 20 percent.”

USAGOLD note:  In the August edition of News & Views, our monthly newsletter, we mention that a whole new grouping of professional investors – pension funds, private wealth management, insurance companies, and sovereign wealth funds – will bring considerable market savvy and purchasing power to the table. One immediate result might be more buying interest on price dips.  Another might be a better blend of investment psychology and objectives that could have a settling effect on the market overall. The chart immediately below indicates, as Holmes points out, the presence of a buy the dip mentality.

bar chart showing strong additions to ETFs on a recent price drop in SeptemberChart courtesy of Seeking Alpha • • • Click to enlarge

Repost from 10-1-2020

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