Review the following quote:

"Given that the gold price is trading at a 25% premium to its fair value and that we can imagine several scenarios whereby the US dollar could rally and the gold price could fall, it seems to me that betting on a higher gold price right now is merely a bet on the Greater Fool Theory. That is not to say that the gold price could not continue to rally - markets can remain irrational far longer than rational people ever imagine they would. Personally, though, I have no interest in buying an over-priced asset in the hope that it will become even more over priced - not even gold." - ENDQUOTE

Wow! Pretty serious stuff, and I guess buying gold now is risky right? This is largely the same argument that many people are making to avoid silver, btw. So, who made that statement above?

Well, it was Paul Van Eden, and he said it back in 2009 when gold was just above $1000... Some things never change, and some guys always think they have all the answers and that the world has to unfold exactly the way they see it.

I also want to emphasize that so many people make statements about a crowded trade, and that bullish sentiment numbers are at abnormally high levels, or other such nonsense. I do not know where the sentiment numbers come from but I spend a great deal of time researching this market and I would estimate that more than 80% of what I read is bearish for the PM sector. Almost everyone thinks the market must trend lower. Given that only a tiny minority of investment money is even interested in the metals at all, and of that most of the money is flowing out right now, or outright short, to me the contrarian play is to be a buyer.

There is always going to be a group that thinks gold and silver are bad choices for investment. People will always come up with reasons to support this opinion. For more than 10 years these people have been dead wrong. Yet we have more hysteria against the market now than ever, to the point where even noted PM bulls have turned bearish. In the fullness of time, I wonder how many of the people that think they are smart to be sellers at $40 will ever re-establish positions. What if silver recovers tomorrow and shoots back up to $50 shortly after, on the way to $400? How many of those people will be around to make a dollar on that move?

We have not heard much from Paul Van Eden lately. He was out of gold at $1000.

cheers!

mike