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Gold prices did not recover -- like a market state taking a beating.
While some investors may be squirming -- next guest is actually making money on that deal He has been shorting gold for weeks and says that the metal is not done falling.
Honest then that found -- is the founder of black -- my capital.
And fall -- as you are no joins us I'm going to see if not punitive.
Appreciate chick come in and OK you justice to set the stage here you have been long on gold since 2000 it's it's not that you don't like gold.
You did like gold you change your mind a couple of weeks ago what made you change your mind.
Well it's really a monetary -- -- policy story.
You know the Fed balance sheet has only.
I mean it's increased about.
Since the beginning of QE2 today and I am excited yet beginning QE2 -- end of QE2 which was June 30.
But since then has contracted point 4%.
In the same period the Japanese balance sheet is up nine point 2%.
The ECB balance -- is up six point 7%.
The US dollar should really be strengthening right now has fundamental reasons to the -- reason why people have been piling into gold -- an expectation of QE3.
During that same period where the Fed printing more money which would lower the value of the dollar further but as ready as we heard we got a pretty clear indication.
From Bernanke last week that's not gonna happen.
Brett and that's that's what we continue to expect a -- dog will get stronger and gold will continue get weaker it's also something simple which is that so many people.
Owned gold right now right it's -- went everybody owns some things you think maybe that's the time to get out of it right right exactly I mean in financial markets you need new buyers are new sellers to move prices.
In gold you know there's not a whole lot of people out there don't know about gold at this point you know you saw the silver bubble earlier this year -- single take on a parabolic trajectory.
It's not good for the launch so you've made money short term in the past couple of days now gold you know how fickle and is trying to Michael up to -- RUN.
Are you short on gold for the long -- are you ready to go to state -- your short bets.
For a couple of weeks if not months -- well you know when you shorting -- security the time horizon becomes much shorter you know sell -- tend to be.
Much quicker much more -- and then then build ups so.
-- in terms of exactly how long it's gonna take I can't really tell you but I let's talk about price and it's now over eighteen will it be under fifty do you think that I -- -- -- -- I do think 15100 is a reasonable target to fifteen is is is the bottom.
Well I don't know if that is the bottom -- that point you know investors -- is -- -- be so damaged on gold and gold is suspected of -- He could continue following you know I mean gold is literally only worth what the next guy's going to -- -- specifics on how do you short gold do you go long the dollar for example right we have long dollar positions against the Euro and the yen as well as -- frank.
But specifically so that would be the UUP.
For those looking for an index the UUP is is one way to play the right now by UP could short the FX the -- sure that they XY.
Or you can do we do which is short gold futures and buy puts uncle features what about -- does that play into this at all because I was surprised despite the fact that we're gonna get more Libyan oil -- saudis are are not cutting right now.
And demand is probably gonna be going down still oil was up why -- -- Ed today you know obviously intraday movements are tough to explain.
In the long run crude and gold response to the same -- right to monetary policy but it wasn't so today it was it wasn't just they went and absolutely the opposite directions threat.
Well you know I mean crude is also had pretty big fall from the top I mean I mean -- been coming down around eighty you know saudis -- probably cut production in somewhere in that range so it is probably got somewhat of a floor in that range now if we see you know large -- European banking collapse.
-- something else on that magnitude.
It will fall through that just like -- didn't OK and -- fun just to be clear you don't see that total bottom dropping out of you don't see gold going back below a thousand announced that it I don't know you know I mean at this point sentiment is so.
-- irrationally high on the metal bed you know once it changes that could change permanently -- it really depends on you know how fast that falls.
As well as.
Really what investors want at that point on it then -- -- develop good to see you Jonathan thank you for coming in appreciate it.
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