We were due for a dip in Gold
Apparently the Big money have been getting out of Gold since Nov. (slowly and in small chunks not to scare off Joe blow investor who pays for most of their wealth), waiting for this pullback. I believe they are now ready and waiting to get back in.
We may near $1,300 gold and depending on how the mainstream media spins it, we may go as low as $1,200 but I doubt it.
China needs to revalue their currency to help control inflation because their int rate hikes aren't working.
They also don't want to risk slowing their economy with int hikes and credit restrictions.
A stronger Currency is another way of controlling inflation plus gives you better buying power to purchase commodities like Gold. It also help them reduce their reliance on export for future growth.
They also want gold to back their currency and the Chinese people are not that trusting of their banks or gov't (lessons from the past) so they like to hold real assets like precious metals.
The market will probably sell natural resources thinking that the stronger Chinese yuan will slow China's economy therefore reduce demand for resources.
BUT it will increase China's purchasing power so they can feed their own internal growth.
When the smoke clears Gold will be shooting to $1600 and eventually higher.
The rest of the story for Gold to keep rising hasn't changed. (money printing, inflation hedge, safe haven etc)
I think the Chinese will also keep buying into this dip, hopefully not making it as low as some may hope or they may help push it down but they will buy more and this will add to the growing POG momentum.
YRI like other stocks rely on the POG but I don't believe it will drop like it did previously. Seems to be more resistance this time around and more support. I also believe when we do start to turn, it will be quicker, with more strength.
The danger of selling into this decline is that you might get stuck buying back in at higher prices. (Done that, been there)
I'm a long term investor and will live through this short down turn and take the opportunity to buy some more of my favourites. To each his own but I'm not worrying about YRI, this isn't a risky play like a lot of the juniors.
Hopefully I was a little clearer than mud.
GLTAL