Commenting on the recent weakness in the gold sector, long-time gold bull and former hedge fund manager Bill Fleckenstein wrote the following on Minyanville.com this afternoon (bold emphasis added by GoldAlert):
The gold correction can certainly continue, or gold could rally and then correct more (remember, the high-frequency trading computers that push stocks around like mosquitoes also operate in gold.) The path of the next handful of days is impossible to guess, which is just the nature of the beast. Sometimes market action is such that it seems quite possible to decipher what may happen next, and other times it isn’t. I believe we will have a pretty good clue once we see how folks respond to Ben’s Jackson Hole performance.
I don’t believe the gold bull market has ended, but this decline is why I am always telling people they need to manage their positions and have a plan for when the market goes their way and/or against them…
Having said all that, I would just note that the market was due for a correction at some point and is now getting it. I say, let’s get it over with to clear out the extra hot money. Once it has passed, I think gold stocks may finally begin real out-performance, as people’s post-correction expectations of future gold prices might be far higher than they have been….In addition, the miners have behaved better (so far, but especially yesterday) than they have in prior selloffs, which might be important. I am optimistic these are clues to what comes next, and hot head fakes.
Fleckenstein did not mention any specific gold stocks, however.