I should have known better. Gold- every few years gold gets hot and everyone piles in. I have never warmed up to gold- it’s too intangible to me. It doesn’t create much commerce other than in teeth and jewelry.

Gold pundits have been pointing out massive demand out of China as the spark fueling the recent gold rally. I believe these claims are greatly exaggerated. I believe it was one of those situations where gold was going up because it was going up.

Could it be a hedge against inflation and a falling dollar? Not likely- in the last several trading days Bernake has pontificated on keeping inflation under control and the dollar weakened further. Yet, gold has fallen another $20.

It is the market’s job to make the most number of people look as foolish as possible. About a month ago, several of my intrepid gold buddies in Canada called and claimed if gold broke through $700, $1000 would be the next stop.It broke through $700 and collapsed.  Perhaps that will be true down the road. I don’t think so.

I believe the gold speculative bubble has burst. It’s over. I’m sure many of you will completely disagree, and I will be happy to post your comments. In my view, it’s over.

With regard to Golden Peaks- this company is on the verge of a major development in Argentina. Every test hole they drill all through their claim brings positive results.

However, I am going to slowly liquidate my position at a loss. Check out the chart:

Note the huge surge in volume when we got into this idea on a breakout. Down from hundreds of thousands of shares everyday, now it barely trades. As I write today’s BLOG, the stock has traded all of 1600 shares. That’s a positive and a negative. The stock is very illiquid now which is a negative, but on the plus side it would appear that everyone who wants to sell has done so.

I intend to slowly start liquidating my position of 20,000 shares, which is currently at about a 20% loss. I believe gold fever has broken, and the meteoric rise in these types of companies is over.

On the other hand, the company is doing very well in the exploration process. If you believe this is an ongoing correction in a bull market for gold, and you are a long term investor, simply hold the stock and wait for better times.

Remember- in the US you trade the stock through symbol GDPEF.

Comments and questions are welcome. I would appreciate some varying viewpoints on the future of gold prices.