Man the Lifeboats

(Image: source)

Those who've read my books know that I am a long-term fan of gold and other precious metals. Nonetheless, I am a trader and a contrarian at heart, and it always makes me nervous when, to paraphrase Jim Rogers, everybody seems to be on one side of the boat. Right now, the list of those who are positive on the sector looks to be growing by the day hour, including:

1. Wall Street analysts (their pitiful track record as a group speaks for itself)
   

• "Gold at $1,950 Within the Month Reaffirm UBS; JP Morgan $2,500 Year End Call Remains" (Business Insider)
  
• "Analyst View: Where Gold Prices Are Headed" (Telegraph)
  

2. Small investors (including a gaggle of late-to-the-party newbies looking to join the rush
   

• "The Gold Rush Is On Again" (Lake County News-Sun)
  
• "Americans Choose Gold as the Best Long-Term Investment" (Gallup)
  
• "Soaring Gold Price Triggers Rush to Jewelry Boxes" (San Francisco Chronicle)
  

3. Central banks (a group which has largely been avoiding the metal for years)
   

• "Emerging Central Banks Boost Gold Holdings in July" (Reuters)
  
• "Central Banks 'Keen to Retain Gold'" (bobsguide.com)
  

4. The media (a number of which are rushing out special reports on gold investing)
   

• "Talk of Gold Bubbles Ignores the Facts" (Financial Times)
  
• "5 Reasons Gold Is Headed for $3,000" (MSN Money)
  
• "Are Gold & Silver ‘Win-Win’ Plays With Or Without QE3?" (Barron's)
  
• "The Golden Age Of Gold" (CNBC)
  

5. Overseas investors (including the Chinese, who tend to be trend followers rather than trendsetters)
   

• "Asian Consumers Driving Demand For Gold" (CNBC)
  
• "China Punters Sway Gold Market" (The Standard)
  
• "Brazil Metal Rush: Boom Ahead in Gold, Copper, Iron Ore Mining" (CommodityOnline)
  
• "Australians Catch Gold-Mining Fever" (Wall Street Journal)
  

With all those bulls around, I'm wondering who is left to buy (in the short run, at least).

Man the lifeboats?

Michael J. Panzner