Legendary gold trader Jim Sinclair sent an email alert to subscribers tonight, advising gold investors: As Gold and Gold shares rise from the lows, do not sell. As the bottom of this reaction of the gold price sets in cement, please do not supply the shorts covering with your gold and good gold shares.
Sinclair states that Gresham’s Law is propelling gold back into an accepted monetary form, as the BRIC central banks attempt to accumulate 15% reserve balance in gold:
The economic axiom known as Gresham’s Law is operating in the Central Banks of the BRICs whereby gold is being accumulated with a goal of 15% of the reserve balance. The goal of 15% of reserves are the currency gold, and gold’s ascent in the marketplace due to the effect of Gresham’s Law to an accepted monetary form.
Sinclair urges precious metals investors to sit tight and hold onto their gold through the coming volatility as gold breaks through $3,500 and $4,00 and heads to $4,990/oz.
Sinclair’s full alert is below: