Gold & Silver

Gold
Back on Aug.21, I again mentioned that I have been enjoying shorting the gold price when it
falters. I did so again over the past month via the DZZ ETN and covered today after DZZ opened
on a nice gap. DZZ chart. This was good, nicely profitable fun, but the gold price is so
ridiculously elevated and the long side players so intensely devoted to it that it is not really at
a point where my skills, as limited as they are, are very useful. I can think of good reasons why
gold would be in a bull market, but its price is absurdly high to me. $800 an oz. I can fathom and
tie to concrete economic realities. But, to me, the metal is beyond the pale at current price levels.
If I do short it again, I will use DZZ but only if gold appears to have entered a genuine bear
market. My cumulative return on my shorts since late 2010 was +52.4%.

Silver
Silver has this colorful history in the US, replete mostly with scoundrels but with a few saints
thrown in. When the silver price hijackers are quiescent, it can be an interesting investment.
When I wrote about it in early Apr. this year, the boyz were levitating it toward $50. But
those who know silver's history also know it is one of America's great crash dummies. Now
it is at $30. oz. Technically it is oversold, but like gold, is trading well above sensible
measures of economic value. Because silver is in a strong corrective phase already, I
might consider shorting it on occasions when the time looks right and stay away from the
gold. $Silver.